ZK Technology Solves Banking’s Blockchain Dilemma

As the world of cryptocurrency shifts toward regulated, enterprise-grade applications, a critical question has emerged in boardrooms and on blockchains: can privacy, compliance, and interoperability truly coexist? For Alex Gluchowski, the co-founder and CEO of ZKsync, the answer is found in zero-knowledge (ZK) technology. The company’s latest initiative, Prividium, aims to redefine how financial institutions adopt blockchain infrastructure.

For years, banks have faced a difficult choice. They could build private blockchains that are secure and compliant but isolated from the wider financial world, or use public blockchains that offer interoperability but sacrifice privacy and control. According to Gluchowski, that trade-off is now a thing of the past. In a recent discussion, he revealed that ZKsync is collaborating with over 30 global institutions—including Citi, Deutsche Bank, Mastercard, and two central banks—to explore a new model for private yet interconnected blockchains.

The Prividium initiative outlines how enterprises can use ZK technology to operate their own permissioned chains. These networks remain fully under institutional control while connecting to others and being secured by cryptography, not trusted intermediaries. “For the first time, it’s possible to bridge the gap between private and public domains using ZK technology,” Gluchowski stated.

How Privacy and Compliance Can Coexist

The primary hesitation for institutional blockchain adoption has always been balancing data privacy with regulatory transparency. ZKsync’s Prividium model addresses this directly through a combination of granular access controls and zero-knowledge proofs. “Institutions can define who can see what, down to individual contracts and accounts,” Gluchowski explained.

This system allows regulators or compliance partners to have view-only access to specific parts of the system. They can receive cryptographic proofs confirming that rules were followed without exposing sensitive user data. Enterprises can even integrate familiar authentication tools like Google Workspace or Okta to manage visibility rights. This ensures that requirements for Anti-Money Laundering (AML), Know Your Customer (KYC), and sanctions are met while disclosing only the minimum necessary data. As Gluchowski puts it, “It’s privacy with accountability.”

Tokenized Bank Deposits: The First Real Use Case

Among the applications outlined in the Prividium report, tokenized bank deposits, or institutional stablecoins, are the most immediate and sought-after. Large corporations often manage funds across multiple jurisdictions, and moving capital between subsidiaries can take two to five business days. Prividium’s model enables instant settlement by allowing banks to issue tokenized versions of deposits that can move freely across enterprise networks.

The process is straightforward: a company deposits funds in a bank, which then issues tokens representing that deposit. These tokens, which are essentially stablecoins backed by fiat reserves, can be transferred between subsidiaries or partners in seconds. When users need to cash out, they can redeem the tokens at the issuing bank. This approach creates what Gluchowski calls “programmable, interoperable cash” that works directly with banks. It also aligns with Europe’s Markets in Crypto-Assets Regulation (MiCA), which encourages compliant, tokenized payment systems.

ZK Proofs Turn Ethereum into Finance’s Common Layer

Gluchowski doesn’t see this as a move toward a segregated “institutional Ethereum.” Instead, he envisions a future built on connection. “Each institution will have its own permissioned chain, hosting tokenized deposits and other assets, but they’ll all settle on Ethereum,” he said. He stressed that Ethereum is the only truly decentralized and resilient settlement layer, describing it as a neutral ground where everyone can meet.

Citing Ethereum’s ten-year history of zero downtime, Gluchowski highlighted its reliability as a “credibly neutral” foundation. The vision is a network of networks, where each organization runs its own chain, all interconnected through ZK proofs and synchronized by Ethereum’s trustless infrastructure.

Building “Incorruptible” Financial Systems

While often seen as complex, Gluchowski compares the security model of zero-knowledge cryptography to that of aviation or healthcare, where multiple fail-safe layers protect critical systems. “ZK is a new cryptographic layer that sits on top of traditional enterprise security,” he explained. “Even if a system is compromised, the proof layer ensures that no invalid transactions can be confirmed.” ZKsync refers to this as an “incorruptible financial infrastructure,” where human error or security breaches can’t alter the truth recorded on-chain.

This entire framework runs on the ZK Stack, the same technology powering the public ZKsync Era network. Private deployments simply use a different configuration to keep data within enterprise systems. Through its advanced Atlas upgrade, ZKsync has already achieved performance of over 10,000 transactions per second (TPS) with sub-cent transaction costs, demonstrating that the technology is ready for demanding real-world applications.

High-Performance for Real-World Finance

According to ZKsync’s Alex Gluchowski, the firm’s Atlas architecture is delivering groundbreaking results that are ready for production environments. “Atlas brings unprecedented performance,” he stated, pointing to real-world tests achieving between 15,000 and 20,000 transactions per second (TPS). At a cost of approximately $0.001 per stablecoin transfer, this performance positions the technology as a practical solution for large-scale financial operations.

Private Stablecoins Versus CBDCs

Gluchowski maintains a pragmatic stance on the rise of central bank digital currencies (CBDCs), noting that zero-knowledge technology could easily support privacy-preserving government-issued currencies. However, he believes private stablecoins are poised to remain more agile and competitive. “In many ways, stablecoins already behave like CBDCs,” he explained. “They’re just more efficient and innovation happens faster in the private sector.” He also highlighted that the U.S. has signaled a preference for letting regulated private entities lead digital currency development rather than issuing a direct CBDC.

Balancing Privacy and Regulatory Compliance

At its core, ZKsync’s Prividium initiative is designed to resolve the long-standing conflict between institutional privacy and regulatory compliance. Gluchowski believes the future isn’t about choosing one over the other but about creating systems that guarantee both cryptographically. He argues that private money will always maintain a technological advantage, and networks like Prividium provide the essential framework for businesses to use it in a safe and compliant manner.

Mathematics as the New Foundation for Trust

The Prividium project represents a fundamental shift in how financial institutions approach trust in the blockchain era. By merging zero-knowledge cryptography with enterprise-grade infrastructure, ZKsync is demonstrating that privacy and regulation can coexist. This approach offers a clear path forward as frameworks like Europe’s Markets in Crypto-Assets (MiCA) regulation reshape the digital asset landscape. It allows banks, regulators, and developers to collaborate within the same ecosystem without sacrificing control or transparency.

If the last decade of crypto was about creating open systems, the next will focus on bridging them securely. Gluchowski concludes that the foundation for a truly incorruptible financial system is this bridge—one “secured by mathematics, powered by Ethereum, and guided by zero-knowledge proofs.”