Privacy and compliance—these two words have been entangled in the financial industry for too long. On one side are regulatory red lines, and on the other are institutions' demands for business secrets; neither side can retreat. But this deadlock may soon be broken.

Take cross-border payments as an example. An international bank needs to process large transfers. Traditional SWIFT takes three to five days at best, with outrageously high fees. What about on-chain solutions? Using zero-knowledge proof technology, transaction details are fully encrypted and hidden—business secrets are well protected. The key is that regulators hold specific audit keys, allowing them to penetrate the encryption when needed to identify money laundering risks. This "default privacy, post-transaction transparency" logic reduces settlement times from days to seconds, with costs three to four times cheaper.

Looking at asset management. Suppose a $1 billion real estate fund is to be tokenized on-chain and sold to global retail and institutional investors. What's the difficulty? Each person's share must clearly correspond to their rights, but investor identities and holdings need to be protected. Automated audit records must also be generated to satisfy regulatory authorities worldwide. Europe has done this with a fund, increasing liquidity by three times without leaking any client information. Two years ago, such a scenario would have been unimaginable.

The DeFi space is also undergoing change. Previously, DeFi was synonymous with "anarchism." Now, it's different. You can build "compliant lending pools": institutions can use tokenized government bonds as collateral to borrow money, with privacy-preserving negotiations on interest rates and counterparties. Meanwhile, risk control data like fund flows and collateral ratios are fully transparent to regulators through cryptography. This is no longer a wild experimental playground but a formal tool with risk management frameworks.

These cases point to one direction: future financial infrastructure must be programmable and inherently designed to protect commercial privacy. It's not about revolutionizing the old system but upgrading it—more efficient, safer, and more aligned with the needs of the times. Only when banks and funds truly start using these technologies can they be considered fully implemented.