Recently, I had dinner with friends from traditional finance, and we discussed the issue of institutional funds going on-chain. He spoke quite frankly — privacy protection and regulatory compliance are like two walls, stuck in the middle and unable to move.

Basically, the contradiction is this: on-chain transparency means exposing business secrets, but complete privacy makes regulatory review impossible. A dilemma.

However, there's an interesting idea. Instead of choosing one or the other, why not integrate these two elements? For example, using zero-knowledge proof technology, one side locks the asset transaction information so outsiders can't see the details; on the other side, leaving an audit channel for regulators so they can verify compliance without needing to peek into privacy. It's somewhat like a safe idea — internal secrets are locked away, while the outer shell is made of regulation-approved transparency.

This way, institutions don't need to redesign their business processes; they can directly map assets into this container, avoiding the risk of exposing business secrets on-chain while leveraging the efficiency advantages of blockchain. From this perspective, the current surge toward RWA (Real-World Assets) is fundamentally about assets finding compliant carriers. This kind of solution that respects privacy while embedding into existing regulatory frameworks might be the key to truly driving institutional on-chain adoption.