In the blockchain world, it's always a trade-off between transparency and privacy — you can choose either one but not both. But this doesn't necessarily mean a dead end.

Some Layer-1 projects are exploring a new approach: using zero-knowledge proof technology to achieve privacy protection while meeting the regulatory requirements of MiCA and GDPR. What does this mean? It means banks and institutional clients can operate on-chain without exposing sensitive data, while still passing compliance audits.

From a technical perspective, this type of solution decouples data encryption from regulatory transparency. User data is protected, but transaction compliance remains verifiable. For financial institutions with regulatory needs, this opens up new possibilities.