In Part 5: Where Privacy Belongs, we examine how Canton’s approach to privacy differs architecturally from other models in the market. The report breaks down the trade-offs of hidden-state privacy, app- and wallet-level bolt-ons, and Canton’s selective-state design, and looks at how that architecture is already supporting institutional-scale activity in production.

Key Insights from the Report

• Regulatory Middle Ground: Regulators have consistently rejected both extremes, full transparency and full secrecy, targeting anonymity-enhancing tools while enforcing data protection standards like GDPR. Recent commentary from the SEC’s Crypto Task Force points to selective disclosure as the direction the industry is converging on.
• Hidden-State Privacy’s Tradeoffs: Privacy coins and ZK-based designs deliver confidentiality but at the cost of auditability. Technical incidents, including a soundness bug disclosed in 2026, illustrate how the same obfuscation that protects privacy can also make failures undetectable.
• App- and Wallet-Level Bolt-Ons: Tools like mixers and ZK wallets add privacy on top of transparent chains, but the underlying activity often remains traceable, and adoption has carried regulatory risk for legitimate users as well as bad actors.
• Selective-State Privacy: Canton’s architecture partitions the ledger so each party sees only the state it’s entitled to, with disclosure defined per contract rather than added on afterward. This preserves auditability for authorized parties while keeping data private by default.
• What’s Live Today: Canton now processes more than $9T in tokenized assets monthly, across 800+ institutions, with assets including DTCC-custodied Treasuries, Franklin Templeton’s iBenji fund, and stablecoins from Circle and Brale already running in production.

To explore how Canton’s privacy-first design is scaling into real institutional infrastructure, download the full report below.