Why public blockchains are a problem for institutions
Every trade on a public blockchain is a press release nobody asked to send. For a retail trader that is a quirk, and an opportunity to be front-run. For a bank, a fund or a market maker it is a deal-breaker.
Positions, hedges, counterparties and timing become public the moment they settle. Competitors can read them, bots can trade against them, and analytics firms can put a name on them.
What the leakage costs
Europe's markets regulator called the practice widespread, often undisclosed, and at odds with "the principles of fairness and integrity." ESMA 2025
Regulators are saying it out loud
In December 2025 the SEC chairman made the case directly: institutions need to build positions, test strategies and provide liquidity without telegraphing them, and if every order and hedge were visible in real time, markets would invite "front-running, copycat behavior, and 'pile-on' dynamics." SEC 2025
Pushed in the wrong direction, crypto "could become the most powerful financial surveillance architecture ever invented."SEC Chairman Paul Atkins, 15 December 2025
Central banks reached the same place for the new rails. The BIS Project Agorá report, written with seven central banks and more than 40 firms: "A shared ledger does not require shared data." Information should be shared "on a need-to-know basis." BIS 2026 J.P. Morgan's blockchain unit wrote that the promise of tokenization "hinges critically on addressing institutional-grade privacy." Kinexys by J.P. Morgan 2024
What institutions need instead
Traditional markets are already private, and not by accident: a repo between two banks is known to the two banks, their custodians and, when required, their regulator. Nobody else. That model has a name, need-to-know, and the job now is to make it true on-chain, on every chain institutions use.
How FinP2P delivers need-to-know privacy Privacy by chain