Binance founder Changpeng "CZ" Zhao has issued a stark warning that the inherent transparency of public blockchains like Bitcoin and Ethereum is creating a significant barrier to corporate adoption of cryptocurrency for routine payments. Zhao explained that businesses worldwide are hesitant to use crypto for salaries and expenses because on-chain visibility exposes sensitive financial data, creating substantial risks for companies and individuals.
Zhao highlighted a specific payroll example: if a company pays employees on-chain, outsiders can view the amounts paid to each worker. While traditional banking systems treat salary data as private, public blockchains make this information observable. "This reality discourages firms from adopting crypto for internal payments," Zhao stated. He also raised safety concerns, warning in earlier comments with investor Chamath Palihapitiya that such visibility could expose users to theft or scams, with high-profile individuals facing higher risks when their balances and income become public.
Industry professionals have echoed these concerns. Avidan Abitbol, formerly a business development specialist at the Kaspa project, said companies fear exposing operational data like supplier relationships, revenue patterns, and strategic partnerships through their transaction histories. Abitbol warned that visible payment flows could enable targeted fraud or phishing attempts, as attackers can monitor large transfers and exploit predictable payment behavior. "This exposure limits institutional participation in Web3 systems," he concluded.
The debate over privacy is intensifying alongside advances in artificial intelligence. Eran Barak, former CEO of Shielded Technologies, explained that AI tools can analyze public blockchain data at scale, combining it with other sources to build detailed financial profiles without needing private access. This technological capability adds urgency to the demand for privacy-preserving tools like zero-knowledge proofs, which aim to hide transaction details while still validating payments on-chain.
This corporate caution exists within a broader, passionate debate about financial privacy and surveillance. In a separate opinion piece, Tim Black, Product Lead at ShapeShift, argues that traditional Know Your Customer (KYC) requirements represent "subconscious theft" of personal data, turning privacy into collateral damage. He criticizes banks for demanding passports, biometrics, and device data, then storing it in "breach-prone databases that individuals can never truly reclaim." Black points to recent incidents, including Coinbase insiders exploiting customer data for extortion and a Finastra data breach that saw 400GB of sensitive information from 45 of the world's largest 50 banks lost to cybercriminals.
Black contends that finance has shifted from neutral infrastructure to a "permissioned gatekeeper," where access can be frozen or revoked, turning participation into a conditional privilege. He warns that stricter KYC demands, coupled with geopolitical tensions, could exclude over 850 million people from digital banking systems due to a lack of stable documents or addresses, not criminal activity.
The proposed solution from privacy advocates centers on cryptographic innovation. Black highlights the surge in zero-knowledge encryption layer 1 ecosystems like Zcash (ZEC) and Monero (XMR), as firms consider "becoming hardened by Zcash." The core promise of zero-knowledge technology is that it allows individuals and businesses to prove eligibility or validate transactions without revealing underlying identity or sensitive details. This enables "selective disclosure" and removes the need for centralized, vulnerable databases. Black acknowledges that zero-knowledge encryption is still far from becoming the norm and that early adopters may face "exclusion, loss, and uncertainty," but he believes that once normalized, such privacy-preserving practices "will not contract, but expand."
