Privacy as a Catalyst for Institutional Adoption, Says Matter Labs CEO

Privacy tools gain traction with institutions, says Matter Labs CEO.

The rising popularity of privacy tools is driven not only by retail users but also by institutional interest. This was stated by Alex Gluchowski, CEO of Matter Labs, the company behind the L2 solution ZKsync, in an interview with Cointelegraph.

According to him, banks and corporations require zero-knowledge proof (ZK) solutions to operate on public blockchains.

The expert identified two types of privacy: cypherpunk at the account level and institutional at the system level.

“Corporations need full control over their data flows, concealing them from everyone else,” he explained.

From Meme Coins to Systemic Requirements

Gluchowski believes the growth of the crypto market from retail users has stalled. This phase was marked by speculative trends without real application.

“For a long time, the crypto industry was oddly obsessed with unproductive assets, which was clearly unsustainable,” he said, describing meme coins as “purely speculative casino chips.”

The situation changed with regulators’ attitudes. Previously, exchanges conducted delistings of privacy coins, and U.S. authorities imposed sanctions on services like Tornado Cash. Now, the approach has become more selective. According to Gluchowski, regulators have begun to separate privacy technology from its illegal use.

“It’s like night and day. Previously, no one wanted to touch cryptography—it was a taboo subject. Now the attitude is more like: ‘We must adopt the technology, or we will lose in the competitive race,'” he added.

How Institutional Privacy Works

According to Gluchowski, institutions need a different privacy model than consumers. They require a private execution environment where they can see all their operations, while the outside world sees nothing.

Previous experiments with corporate blockchains like Hyperledger or Corda did not solve the problem, as they remained isolated from public capital markets.

The solution is to combine locally managed private networks with ZK proofs. This allows companies to keep transaction data internally while proving the correctness of operations to the public network without revealing details. The ledger does not see the specifics of the transaction but can verify that the rules are not violated.

Initial Results and Plans

Gluchowski noted that the recent surge in activity on ZKsync is not due to retail speculation but to interest following the announcement of new tokenomics and ZK staking.

The protocol is now positioned as a network of multiple blockchains, including systems managed by financial firms. According to Gluchowski, the first operational implementations of such systems are expected by the end of the year.

In October, the ZKsync team introduced the Atlas update for ZK Stack, aimed at accelerating and simplifying the transition of companies and institutions to blockchain.