a16z Crypto: Privacy is the Key Breakthrough for Institutional Entry into the Cryptocurrency Market

Odaily reported that a16z Crypto published an article explaining its investment in Digital Asset. It stated that the three major obstacles previously hindering institutional adoption of crypto technology included blockchain performance, regulatory uncertainty, and privacy concerns. Now, the blockchain performance issue has been largely resolved, with L1 and L2 networks possessing the scale, speed, and complexity to meet institutional needs; the US GENIUS Act has taken effect, addressing the regulatory issue.

a16z Crypto believes that traditional public chains make transaction information public by default. While this facilitates verification, institutional financial transactions require capabilities such as selective disclosure, compliance requirements, and multi-party collaboration. For example, when banks conduct treasury bond transactions or repo transactions, the transacting parties need to share information but should not expose positions, counterparties, and transaction sizes to all network participants. Therefore, privacy remains the core challenge for institutions entering the chain. Most blockchain projects attempt to adapt institutions to the crypto system, whereas Digital Asset chooses to adapt crypto technology to institutional needs. Mature privacy technology has also become a key breakthrough for attracting institutional entry.