Changpeng Zhao: “On-chain transparency is a hurdle to broader payment adoption… privacy needs strengthening”

Changpeng Zhao (CZ), co-founder of Binance, said the low level of privacy in on-chain transactions is a key factor holding back the wider adoption of crypto payments.

According to Cointelegraph on the 15th (local time), CZ said in recent remarks that “if a company pays employee salaries on-chain, you can click the sender address and see almost everyone’s pay,” adding that “today’s transparency model constrains real-world use by companies and institutions.” He has also said in a conversation with investor Chamath Palihapitiya that the disclosure of on-chain information could translate into physical security risks.

The industry says this line of thinking aligns with the “cypherpunk” ethos that has recently resurfaced within the crypto ecosystem. The origins of decentralized digital money are rooted in the values of communication and asset transfers free from surveillance, but the current on-chain structure can expose sensitive information such as corporate workflows, transactional relationships and financial conditions.

Eran Barak, former CEO of Shielded Technologies, believes advances in artificial intelligence (AI) could exacerbate the issue. As AI-driven analysis leverages accumulated on-chain data, the likelihood is increasing that it can infer corporate activity or identify security weak points. As a result, calls are growing that the evolution of on-chain privacy technology is essential to expand institutional-grade adoption.