Privacy has always been part of crypto’s original promise. Yet, in practice, most public blockchains operate with radical transparency.
Recently, Changpeng Zhao, widely known as CZ, argued that this very transparency may be holding crypto back from becoming a true payment system.
His point was simple but powerful. Without meaningful onchain privacy, businesses and institutions will remain cautious.
If crypto is to evolve beyond speculation and into everyday economic infrastructure, the privacy question can no longer be ignored.
CZ’s Statement about On-chain Privacy
CZ’s argument centres on a structural issue within networks such as Bitcoin and Ethereum. Every transaction is recorded on a public ledger.
While wallet addresses are not directly tied to names, patterns can often be analysed, clustered, and eventually associated with individuals or organisations. Over time, that pseudonymity weakens.
He gave a straightforward example. Imagine a company paying its employees in crypto directly onchain. Anyone could click the company’s sending address and see how much each employee receives.
In traditional banking, salary information is confidential. On a public blockchain, it becomes visible to anyone willing to look. For businesses, that is not a small inconvenience. It is a serious operational concern.
CZ also raised physical security risks. In discussions, including a conversation with investor Chamath Palihapitiya on the All In Podcast, he highlighted that full transparency can make individuals vulnerable.
If a public address is linked to a high net worth individual, executive, or public figure, it may expose them to scams, extortion, or even physical threats. Transparency, in that sense, cuts both ways.
This debate connects to crypto’s deeper philosophical roots. The cypherpunk movement, which influenced the creation of Bitcoin, emphasised encryption and privacy as tools to resist surveillance and protect individual freedom.
Peer to peer digital money was not just about bypassing banks. It was about preserving autonomy. Yet today’s dominant chains prioritise transparency for auditability and trust.
CZ’s position is not that transparency is useless. Public ledgers have strengthened accountability and reduced reliance on central authorities. However, he suggests that the pendulum may have swung too far for commercial use cases. If companies cannot shield payroll, supplier payments, or strategic transactions, they are unlikely to migrate fully to crypto rails. For him, privacy may be the missing link between technical capability and real world adoption.
Is This Really a Problem? How to Address Privacy Concerns
The question, then, is whether this concern is overstated or genuinely structural. From a corporate perspective, the risks are tangible. Transaction data can reveal more than simple payment amounts.
Analysts can infer supply chain relationships, identify recurring counterparties, estimate revenue flows, and detect shifts in operational strategy. In competitive markets, such information is sensitive.
Industry voices have echoed similar concerns. Former business development specialist Avidan Abitbol has argued that enterprises will hesitate to adopt Web3 systems without confidentiality safeguards.
Public transaction histories could undermine negotiation positions or expose trade relationships. In extreme cases, visible payment patterns could increase the likelihood of targeted phishing or financial scams.
The issue becomes more complex when artificial intelligence enters the picture. As AI systems become more capable, they can process large volumes of public blockchain data, detect behavioural patterns, and construct probabilistic financial profiles.
Eran Barak, former CEO of privacy focused Shielded Technologies, has warned that AI assisted analysis could turn transparent ledgers into rich intelligence sources for malicious actors. Public, permanent data combined with machine learning could make deanonymisation more scalable.
That does not mean transparency is inherently flawed. It has delivered auditability, reduced corruption risks, and enabled decentralised verification. The challenge is balance.
Businesses need assurance that sensitive financial data will not be exposed, while regulators and users still require network integrity.
Potential solutions are already under development. Privacy enhancing technologies such as zero knowledge proofs allow transaction validity to be verified without revealing underlying details.
Layer two solutions on Ethereum are experimenting with bundling and abstracting transactions, which can increase practical privacy.
Dedicated privacy oriented projects are also exploring cryptographic techniques that obscure amounts and counterparties while maintaining consensus security.
The path forward will likely involve a hybrid approach. Base layers may remain transparent by design, while privacy layers operate above them. Regulatory clarity will also shape adoption.
Institutions will not deploy capital at scale without confidence that privacy mechanisms are both legally acceptable and technically robust.
If these technologies mature, crypto payments could shift from niche experiments to credible financial infrastructure. Without them, adoption may continue to stall at the edge of enterprise comfort.
Conclusion
CZ’s warning is not simply a technical complaint. It highlights a strategic tension at the heart of crypto. Transparency built trust in decentralised networks, but it may now limit commercial adoption.
Businesses need confidentiality to operate competitively and securely. As AI intensifies the ability to analyse public data, the urgency grows. The future of crypto payments may depend on whether the industry can reconcile openness with meaningful, verifiable privacy.