Limited privacy protections on public blockchains are emerging as a key obstacle to broader crypto adoption, with both retail advocates and institutional executives warning that full transparency can deter real-world usage.

Changpeng Zhao, co-founder of Binance, said crypto’s push into mainstream payments may stall unless privacy improves. While blockchain transparency is often promoted as a strength — offering open, verifiable records — Zhao argued that the same feature can become a liability when sensitive financial information is exposed.

On most public networks, wallet balances and transaction histories are traceable. Zhao pointed to the example of companies paying salaries in crypto: in the current system, observers could potentially view compensation details simply by monitoring on-chain addresses. That level of visibility, he suggested, makes widespread payment adoption difficult.

Institutional players raised similar concerns at CoinDesk’s Consensus conference in Hong Kong. During a panel discussion on the institutional market cycle, Fabio Frontini, CEO of Abraxas Capital Management, stressed that discretion is essential for large transactions.

Transparency, Frontini noted, should not mean universal access. Financial institutions require transactions to be auditable, but only by authorized parties. Full public visibility, he said, is unlikely to be acceptable for major capital flows.

The debate comes as traditional financial products begin moving onto blockchain rails. In December, JPMorgan Chase arranged a $50 million commercial paper issuance for Galaxy Digital on the Solana network. The transaction, settled using Circle’s USDC stablecoin and involving Coinbase Global and Franklin Templeton, demonstrated the efficiency gains of tokenized debt issuance.

However, it also underscored the privacy trade-offs of operating on public infrastructure.

Emma Lovett, credit lead for the Markets Distributed Ledger Technology team at JPMorgan, said institutions need confidence that their wallet addresses and transaction activity cannot be easily traced by external actors. Without stronger safeguards, she indicated, large-scale on-chain adoption will remain limited.

Thomas Restout, CEO of institutional liquidity provider B2C2, added that privacy must be paired with execution certainty. Large financial firms do not experiment with small amounts of capital; they require infrastructure capable of supporting operations at scale with minimal risk.

Until public blockchains can deliver both confidentiality controls and institutional-grade reliability, industry leaders suggested that adoption by corporations, asset managers and everyday users may continue to face structural headwinds.