Recently, I was chatting with a colleague from the compliance department of an investment bank, and he was complaining about the dilemma traditional finance faces when entering the blockchain space. Here's the situation—if they use a public chain, all transaction data is transparent to the extreme, making business secrets virtually impossible to keep; if they use a privacy chain, regulators immediately raise alarms, insisting on clarifying the flow of funds, which is often impossible to explain. As he put it, it's like choosing clothes—either go completely naked or get locked in a dark room—there's no suitable outfit to wear.

Listening to this, I suddenly realized that this is actually a big pitfall in the current Web3 world. I used to think that "privacy compliance" was just a vague concept, but now I understand it might actually be a tailor-made solution for institutional clients.

It reminded me of a project I saw before—a blockchain focused on financial scenarios. Its approach is quite interesting: it’s neither like Bitcoin or Ethereum, where the ledger is fully transparent, nor like some anonymous coins that hide everything. What's the middle ground? The core technology is called "selective disclosure."

To put it simply, you'll understand. Suppose you issue a bond on the chain. On this chain, the key information of the transaction—such as the issuer, total amount of 100 million, annual yield of 5%—is publicly verifiable, so investors and regulators can see clearly. But details like who bought how many shares, or the identities of those investors, can be encrypted and hidden, protecting business privacy. If regulators require an audit, you can decrypt the relevant data as needed.

This way, institutions have real choice—meeting regulatory transparency requirements while retaining necessary business confidentiality. This flexible design of "disclose when necessary, keep confidential when needed" is indeed a feasible approach combining traditional finance and blockchain.