Many have predicted that increasingly strict regulations would stifle privacy-focused public blockchains. The reality, however, has been quite the opposite.

As the EU MiCA regulations are fully implemented and traditional financial institutions begin to seek on-chain solutions, they face a dilemma: they need to issue tokenized bonds while complying with anti-money laundering (AML) requirements and protecting customer privacy. At this moment, projects that have been designed from inception around "compliant privacy" have started to stand out.

The key lies in a module called Hedger. It offers "selective transparency"—asset issuers can generate dedicated read-only audit keys for regulators or auditors without exposing transaction details to the entire network. This clever design effectively addresses the regulatory demands of MiFID II and MiCA. While other public chains are still applying "compliance patches," projects with a native compliant foundation have already gained recognition from licensed financial institutions like NPEX.

The ecosystem is accelerating its transformation. More and more small and medium-sized enterprises in Europe are abandoning the cumbersome processes of traditional bank loans in favor of seeking on-chain financing solutions. Regulations are no longer a hindrance; instead, they serve as a filtering mechanism—allowing truly compliant projects to gain a competitive edge. This may be the market reversal that no one foresaw in 2024.