Privacy Is a Compliance Requirement, Not a Preference
Privacy in blockchain is often discussed as if it were a personal choice. Some users want it, others do not. That framing makes sense in consumer applications, but it falls apart as soon as regulated finance enters the picture. In institutional systems, privacy is not a preference. It is a structural requirement.
Banks, funds, and regulated entities are not opposed to oversight. What they cannot accept is uncontrolled disclosure. Financial regulation is built around selective visibility. Certain parties must be able to verify activity, while others must not see it at all. Traditional infrastructure enforces this through centralized access control and legal authority.
Public blockchains challenge this model by making transparency the default. Every transaction is visible. Every balance can be inferred. This works for open settlement networks, but it creates friction for real-world financial activity. Once information is public, it cannot be selectively withdrawn. That limitation is not philosophical. It is practical.
The more realistic approach is to separate verification from disclosure. A system should be able to prove that rules were followed without exposing the underlying data. When this separation exists, privacy stops being an obstacle to compliance. It becomes part of compliance.
This distinction is important because regulation does not stand still. Reporting standards evolve. Jurisdictional requirements differ. Systems that assume full transparency struggle to adapt without introducing centralized controls later.
Dusk approaches privacy as part of the base infrastructure rather than a layer added afterward. Validation does not depend on revealing transaction details to the entire network. Instead, correctness can be verified without broad disclosure.
