XRP Ledger validator Vet has highlighted an upcoming privacy upgrade on the network, which he noted will boost institutional adoption. Vet drew attention to this privacy feature just as Binance’s founder Changpeng “CZ” Zhao described privacy as the missing link for crypto payments adoption.
XRP Ledger Validator Draws Attention To Confidential Transfers Upgrade
In an X post, the network validator mentioned Confidential Transfers for multi-purpose tokens (MPTs), which Ripple already announced will be released in the first quarter of this year. The crypto firm had explained that this feature would enable institutional-grade privacy on the network by encrypting transactions and balances using Zero-Knowledge (ZK) proofs.
Furthermore, this XRP Ledger feature will enable institutions to launch tokenized assets and manage them securely while maintaining transparency for regulatory compliance and auditability. Vet described this feature as what will fuel future adoption, as he noted that account balance and transfer amounts will be encrypted, but that these institutions will still ensure compliance by allowing selective disclosure to third parties like auditors.
Notably, the network will offer flexible auditability through two distinct models. The primary model will provide trust-minimized, on-chain verification for pre-defined auditors. Institutions can extend this model by enabling this dynamic addition of new parties through re-encryption. Meanwhile, the second model involves using issuer-controlled keys for on-demand access.
The XRP Ledger plans to roll out this feature as Ripple continues to onboard institutions onto the network. As CoinGape recently reported, Ripple partnered with Aviva Investors to launch tokenized traditional fund products on the network. It is also worth noting that XRPL ranks sixth by total tokenized asset value on the network, at $1.9 billion.
CZ Advocates For Crypto Privacy
Binance founder CZ stated that a lack of privacy may be the missing link to crypto payment adoption. He gave an example of how institutions may be uncomfortable paying employees in crypto on-chain, since anyone can trace and see these transactions and know how much employees are receiving.
During an appearance on the All In Podcast with venture capitalist Chamath Palihapitiya, the founder of the top crypto exchange noted that Bitcoin and many other crypto assets still lack adequate features. CZ further cited how this move also poses security risks for investors.
Meanwhile, in addition to the Confidential Transfers privacy feature, XRP community member Bank highlighted other privacy features on the network, including Credentials and Permissioned Domains, which are already live. The Credentials feature enables users to verify a transaction without exposing data. Meanwhile, Permissioned Domains enable institutions to create a regulated environment that they can control through compliance tools such as KYC.
Source: https://coingape.com/xrp-ledger-validator-spotlights-upcoming-privacy-upgrade-as-binances-cz-pushes-for-crypto-privacy/
