For most of crypto’s short history, privacy and compliance have been framed like enemies. If you want privacy, the story goes, you must accept a system no regulator can see into. If you want compliance, you must accept a system where everyone can see everything. That binary is fraying. Real markets run on confidential relationships and selective disclosure, and attitudes toward data exposure have hardened. A December 2025 Thomson Reuters Institute report flags crypto regulation and data privacy as big compliance pressure points for 2026—right up there with fraud and AI governance.
Dusk sits directly inside that pressure. In its documentation, it describes itself as a privacy blockchain for regulated finance, designed so institutions can meet regulatory requirements on-chain while users keep confidential balances and transfers. The building blocks are explicit: zero-knowledge technology for confidentiality, on-chain compliance goals that reference regimes like MiCA and MiFID II, and a modular architecture where DuskDS handles data and settlement while DuskEVM handles execution. It also describes two transaction models, Phoenix and Moonlight, so builders can choose public or shielded flows and still reveal information to authorized parties when required. To me, it’s a bet on privacy by default and transparency on demand.
The most interesting part is not the math; it is the posture. Zero-knowledge proofs let you prove a statement without revealing the underlying facts: “this trade is permitted” without showing who you are or how much you moved. Dusk frames this as “Zero-Knowledge Compliance,” arguing that participants can prove AML/KYC and other requirements without exposing personal or transactional details. It also argues for private smart contracts and “selective transparency,” so regulators can audit when required. The hard part is governance—who can request disclosure, how requests are logged, and what happens when mistakes happen. It’s a compromise that feels workable.
The reason this conversation is heating up now is simple: calendars and regulators. ESMA notes that MiCA entered into force in June 2023, and the implementation phase is visible through technical measures and an interim MiCA register that ESMA updates weekly. National transition periods are also closing for firms that want to keep operating across the bloc. In France, the markets regulator has been reminding firms that the transition period ends on June 30, 2026, and that companies without authorization should have orderly wind-down plans by the end of the transition. When compliance becomes routine, architecture starts to matter.
Europe is also testing tokenised market plumbing in parallel. The EU’s DLT Pilot Regime has been applying since March 23, 2023, creating a framework for trading and settlement of certain tokenised financial instruments under MiFID II. AML expectations are tightening globally too: FATF reported in 2025 that 99 jurisdictions have passed or are passing Travel Rule legislation. That doesn’t mean everybody should collect everything; it pushes data minimization and strict access control into the spotlight. That pressure rewards designs where rules can be checked without dumping raw data onto a public ledger. You can see the practical turn in moves like Dusk and Dutch exchange NPEX adopting Chainlink interoperability and data standards, which is really about fitting into existing rails.
I keep coming back to one question: what should be visible by default? In traditional finance, confidentiality is normal and disclosure is purposeful. On public chains, disclosure is the default and confidentiality is bolted on afterward. If regulated tokenisation is going to grow up, that default must flip. Dusk may or may not become the venue where that happens, but the broader direction feels durable: privacy that can be proven, and compliance that does not require hoarding data, no longer contradict each other.
