Binance Founder CZ Reveals Why Businesses Won’t Use Crypto for Payments

TLDR

• Changpeng Zhao (CZ) says onchain transparency prevents businesses from using crypto for payments because transaction data is publicly visible
• Companies paying employees in crypto risk exposing salary information through public blockchain records
• Public transaction data can reveal trade secrets, business relationships, and financial health to competitors
• AI development will make privacy problems worse as systems become better at analyzing blockchain data
• Industry experts argue privacy tools like zero-knowledge proofs are needed for mass crypto adoption

Changpeng Zhao, co-founder of Binance, has identified the lack of privacy on public blockchains as a major obstacle to cryptocurrency adoption for payments. The executive, known as CZ, argues that transparent transaction records prevent businesses and institutions from using crypto for everyday expenses.

Public blockchains like Bitcoin and Ethereum record all transactions on a ledger that anyone can view. While wallet addresses are not directly linked to names, they can often be traced back to individuals or companies over time.

CZ pointed to a specific example to illustrate the problem. If a company pays its employees in crypto onchain, anyone can view the company’s wallet address and see how much each worker receives. This type of salary information remains private in traditional banking systems.

The privacy concerns extend beyond just salary data. CZ previously discussed physical security risks with investor Chamath Palihapitiya on the All-In Podcast. If people can see how much cryptocurrency someone owns or receives, that person could become a target for theft, scams, or physical threats.

These concerns reflect ideas from the cypherpunk movement, which inspired early cryptocurrency development. Cypherpunks advocated for strong encryption and privacy to protect people from surveillance. Bitcoin was designed as peer-to-peer digital money that could operate without banks or other intermediaries.

Business Transaction Risks

Avidan Abitbol, formerly with the Kaspa cryptocurrency project, told Cointelegraph that businesses will not fully adopt crypto and Web3 platforms without transaction confidentiality. He explained that blockchain data reveals more than just payment amounts.

Transaction records can expose supply chain information, business partnerships, client relationships, and overall financial activity. Competitors who study a company’s blockchain transactions can estimate revenue trends, identify key partners, or track major deals. This transparency can harm companies during business negotiations.

The visibility of transaction data also increases security risks. If attackers can see large transfers or identify payment patterns, they may use that information for phishing attacks or fraud. Corporate theft becomes easier when financial movements are publicly visible.

AI Increases Privacy Threats

Eran Barak, former CEO of Shielded Technologies, said artificial intelligence will make privacy problems worse. AI systems allow hackers to better analyze publicly available data and connect information from multiple sources. Centralized servers holding valuable information already attract cybercriminals.

As AI tools advance, they will be able to scan large amounts of data for clues and predict likely outcomes. With permanent blockchain records publicly available, AI can process huge volumes of transactions to identify high-value targets. An AI system could observe wallet activity, identify repeat payments, and estimate how much crypto a company or individual controls.

This capability could allow the creation of detailed financial profiles without accessing private accounts. Barak believes onchain privacy technologies will become increasingly important as AI capabilities grow.

Privacy-focused blockchain projects are developing tools to hide transaction details while still allowing networks to verify payments. Some projects use zero-knowledge proofs and other cryptographic techniques to improve privacy.

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