Opinion: Eran Barak, CEO of Shielded Technologies
For over a decade, US codes have been in the legal grey zone. Regulators swayed between silence and sudden crackdowns, paralyzing developers, investors and institutions without question.
In 2025, this began to change. The SEC has removed the lawsuit against Binance, citing the need for more explicit rules. The Senate passed the Genius Act and introduced the Federal Framework for Stubcoin. There is a high probability of clarity acts signed by the law.
Even the White House has changed its stance and reversed guidance that discourages employers from adding crypto to their crypto portfolios. The executive order allows for allocation of 401(k) to digital assets. This is a signal that Washington is not inherently dangerous, and is now seeing them as an asset class in the market. The agency is paying attention.
Lawmakers may open the door, but unless infrastructure evolves in parallel, agencies will continue to be hesitant and blockchain will remain limited to retail-driven speculation.
Infrastructure with other intents
Today’s financial rules were drafted in a different era and are struggling to adapt to this digital age. Blockchain is designed to promote trust and resist censorship through radical transparency, but this design now conflicts with modern expectations about privacy, selective access and compliance.
This makes it difficult for most blockchains to comply with governance frameworks born from political processes and to handle specific legal requirements in sectors such as finance, healthcare, and corporate data management.
For example, the European Union’s General Data Protection Regulation (GDPR) gives users the right to be forgotten, but data cannot be changed once it is published on the blockchain.
The Portability and Accountability Act of the US Health Insurance (HIPPA) requires strict health records protection, but it cannot store patient data in a system where every access point can be seen. Meanwhile, financial institutions require selective disclosure. Data is shared with some parties, but not all.
The movement of the fund can be tracked in real time, making markets inefficient where all transactions are completely transparent.
Most blockchains are not ready for regulatory reality
To mean regulation, the system it is intended to govern must require compliance. That’s where the real gap is today.
Web3’s promises are control, privacy and ownership. However, this architecture often turns these ideals into trade-offs. It’s private, but not regulatory and compatible, or open and transparent at the expense of compliance and user trust.
Related: Privacy unlocks blockchain business possibilities
This issue goes beyond transaction data. Metadata surrounding each transaction – the person who accesses it may be as clear as the data itself when and under what conditions. Most chains ignore this layer and put developers and agencies at risk when meeting compliance and audit standards.
This should be changed if you want to provide blockchain to more than early adopters or retail use cases. In traditional markets such as Nasdaq and The NYSE, around 80% of transactions come from institutions, but in crypto, the opposite is almost the opposite, and retailers still dominate.
Unless the infrastructure is adapted, the new law will so far take only Crypto. The agency may welcome clarity, but it will not commit meaningful capital until systems that meet the operating, legal and risk standards of regulated industry are dependent.
The road ahead
Blockchain shows that programmable assets and global payments actually work. The current challenge is to expand them for institutional use. This means that you can create infrastructure that can coordinate privacy, selective disclosure, compliance requirements and blockchain transparency, meeting legal and operational standards for regulated industries.
Ten years ago, early cloud platforms faced similar hurdles of security, auditability and compliance. It took years of engineering, standardization and iteration before these systems could support the world’s most risk-sensitive industries. Once they did, adoptions continued, and the blockchain began to stand at the same threshold.
Thankfully, new frameworks are emerging. Zero knowledge proof, selective disclosure and new talk gnome designs provide developers with the components of privacy and compliance without returning to centralized gatekeepers. These tools are focused on how regulations are beginning to get worse.
If the two evolve together, blockchain is not a tool for speculation or fringe use cases.
It will become a reliable platform for next-generation financial and data infrastructure and can drive the global economy.
Opinion: Eran Barak, CEO of Shielded Technologies.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
