a16z Crypto: Privacy is the key breakthrough for institutions entering the cryptocurrency market

a16z Crypto published an interpretation of the investment in Digital Asset, stating that the three major obstacles hindering institutional adoption of crypto technology in the past included blockchain performance, regulatory uncertainty, and privacy issues. Now, the blockchain performance issue has been largely resolved, with L1 and L2 networks meeting the scale, speed, and complexity required by institutions; the US GENIUS Act has come into effect to address regulatory issues.

a16z Crypto believes that traditional public chains default to public transaction information, which facilitates verification, but institutional financial transactions need to meet requirements for selective disclosure, compliance, and multi-party collaboration. For example, when banks conduct treasury bond transactions or repurchase transactions, both parties need to share information but should not expose their positions, counterparties, and transaction sizes to all network participants. Therefore, privacy remains a core challenge for institutions entering the blockchain. Most blockchain projects attempt to make institutions adapt to the crypto system, while Digital Asset chooses to adapt crypto technology to institutional needs, and mature privacy technologies have become a key breakthrough to attract institutions to enter the market.