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Zcash News Update: Institutions Turn to Zero-Knowledge Proofs Amid Ethereum’s Privacy Shortcomings

Zcash News Update: Institutions Turn to Zero-Knowledge Proofs Amid Ethereum’s Privacy Shortcomings

Bitget-RWA2025/11/12 22:46
By:Bitget-RWA

- Institutional investors are shifting to zero-knowledge proof (ZKP) technologies as Ethereum's privacy limitations drive demand for privacy-preserving blockchain solutions. - ZKP, a $100M-funded project with AI-focused Proof Pods and institutional-grade infrastructure, contrasts with speculative assets like Aptos and Chainlink . - Zcash faces scrutiny as its privacy benefits are undermined by custodial platforms, while 20-25% of ZEC now uses shielded transactions despite price declines. - Franklin Templet

Ethereum's shortcomings in privacy are prompting institutional investors to explore zero-knowledge proof (ZKP) solutions, as both industry leaders and regulators increasingly emphasize the need for privacy-focused blockchain infrastructure. Although

continues to be a foundational platform for decentralized finance (DeFi), its absence of built-in privacy mechanisms has led to rising interest in alternatives such as (ZEC) and new entrants like Zero Knowledge Proof (ZKP), which offer advanced encryption and scalable transaction verification, according to .

Zero Knowledge Proof, designed as a privacy-centric infrastructure for AI-powered applications and backed by $100 million in development resources, is positioned to address the increasing demand for data security within blockchain networks. In contrast to speculative assets on networks such as

(APT) or (LINK), ZKP is focused on delivering practical benefits from the outset: its Proof Pods are built to handle secure AI computations immediately, supported by $20 million allocated to infrastructure and $17 million to hardware, as detailed by . The tokenomics of the project further strengthen its ecosystem, requiring its native token for transaction processing and hardware enhancements, thereby fostering ongoing demand, as explains.

Meanwhile, Zcash has come under fire for its privacy approach. Despite being an early adopter of zero-knowledge proofs, ZEC's value dropped by 37% after BitMEX founder Arthur Hayes cautioned about the dangers of storing Zcash on centralized exchanges (CEXs), which only accommodate transparent addresses, as reported by

. This paradox—where Zcash's privacy features are undermined by custodial exchanges—has reignited discussions about the viability of privacy coins in a regulatory environment that is increasingly wary of anonymity, as also noted. According to CoinDesk, the use of shielded transactions on Zcash has increased, with 20–25% of circulating now held in encrypted wallets, as reported, yet ZKP's enterprise-level infrastructure is challenging Zcash's leadership in the privacy space.

Zcash News Update: Institutions Turn to Zero-Knowledge Proofs Amid Ethereum’s Privacy Shortcomings image 0
The adoption of privacy-oriented blockchains by institutions is gaining momentum. Franklin Templeton has recently integrated its Benji Technology Platform with Canton Network, a permissioned blockchain supported by Goldman Sachs and BNP Paribas, indicating a move toward hybrid models that blend privacy with transparency, as reported. In a similar vein, Japan's Financial Services Agency has revealed plans to enable its top three banks to issue stablecoins pegged to the yen, potentially incorporating privacy-enhancing technologies into mainstream financial systems, as reported. Visa is also piloting stablecoin payments for gig economy workers, using blockchain to facilitate international transactions while safeguarding user privacy, as reported.

Governments are investigating blockchain services that utilize zero-knowledge proofs. Forbes has covered initiatives in the United States and other countries where non-custodial wallets and permissioned blockchains are being developed to provide verifiable transparency without sacrificing individual privacy, as reported by

. These developments are in line with the Bank of England's recent introduction of "temporary" limits on stablecoin holdings, reflecting a broader regulatory trend to balance technological advancement with risk management, as reported.

With its whitelist now open and daily on-chain auctions about to begin, ZKP is drawing interest from those seeking a privacy-centric alternative to Ethereum. For institutional players, the growing adoption of ZKP and similar technologies signals a clear trend: as data privacy becomes ever more critical, the future of blockchain is increasingly tied to zero-knowledge proof solutions.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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