Cypherpunk privacy focuses on individual accounts. Institutions need system-wide privacy to adopt crypto. ZKsync highlights a gap preventing big finance involvement.
Account-Level vs. System-Level Privacy
Privacy has long been a cornerstone of the crypto world. The cypherpunk movement emphasized protecting individual users by enabling account-level privacy — think encrypted wallets, anonymous transactions, and untraceable identities. This works well for individual users who value decentralization and privacy.
However, a major divide exists between individual users and institutional players. According to a developer from ZKsync, a leading Layer 2 scaling solution, this is exactly where crypto is falling short. While individuals may be satisfied with wallet-level privacy, institutions require something far more robust — system-level privacy.
Why Institutional Privacy Matters
System-level privacy refers to the ability to keep entire operational structures, transactions, and strategies confidential within a blockchain ecosystem. Unlike individuals, institutions must adhere to stricter compliance, confidentiality, and risk management protocols. They can’t risk exposing sensitive information such as trade sizes, counterparties, or transaction patterns on a transparent ledger.
Until blockchain networks provide this deeper level of privacy, large financial institutions are unlikely to participate meaningfully. Public visibility into sensitive financial activity remains a non-starter for most regulated entities.
INSIGHT: “Cypherpunk privacy” is account-level. Institutional privacy is system-level. Until that layer exists, big finance stays on the sidelines, says ZKsync developer. pic.twitter.com/r9t5qih6V7
— Cointelegraph (@Cointelegraph) November 11, 2025
ZKsync’s Take on the Future of Privacy
ZKsync, known for its advancements in zero-knowledge proofs, sees system-level privacy as the missing layer for true institutional adoption. Technologies like zk-SNARKs and zk-rollups are paving the way for more private and scalable blockchains.
But we’re not fully there yet. The infrastructure needs to mature beyond protecting just wallets — it must create an environment where institutions can operate securely and privately. Only then will we see major players like banks, hedge funds, and asset managers step into the decentralized finance space.
As the crypto ecosystem evolves, solving this privacy gap could unlock billions in institutional capital.