Andreessen Horowitz's Crypto Arm Highlights Privacy as 2026's Key Competitive Moat

Andreessen Horowitz (a16z) has highlighted the rising importance of privacy in the blockchain space as a key competitive moat for 2026. In a recent report, the firm noted that privacy-focused networks are well-positioned to attract and retain users who prioritize anonymity. These users are less likely to transfer assets to public blockchains, which risk exposing their data.

The growing adoption of tokenized assets is another trend gaining momentum. Lloyds Bank completed the UK's first gilt purchase using tokenized deposits, partnering with Archax and Canton Network. This transaction demonstrated how tokenized assets can enable faster, more efficient financial transactions by turning real-world assets into digital representations.

Privacy is increasingly seen as a differentiator in blockchain adoption. Public blockchains, while transparent, may not suit users seeking to protect their financial data. According to a16z, this creates a 'winner-take-most' dynamic where privacy-focused networks can establish long-term loyalty among users.

Why the Move Happened

Privacy is becoming a central concern for blockchain users as more financial activity moves online. The firm noted that once users adopt a privacy-focused network, they are less likely to switch due to the risk of data exposure. This behavior is reshaping how blockchain infrastructure is built and managed.

Several institutions have begun experimenting with tokenized assets to improve settlement efficiency. Lloyds Bank's recent transaction showed how tokenization can transform traditional banking by enabling instant, secure transfers of real-world assets.

The move toward tokenization is also supported by regulatory developments in the EU. StoneX Digital recently obtained a Crypto-Asset Service Provider (CASP) license, allowing it to expand its digital asset offerings across the bloc. This aligns with broader regulatory efforts to standardize and support the use of blockchain-based assets.

How Markets Responded

The market is responding positively to these developments. New ETFs focused on stablecoin and tokenization infrastructure have launched to meet investor demand. MarketVector and Amplify ETFs introduced funds designed to provide regulated exposure to companies building infrastructure for stablecoins and tokenized real-world assets.

Stablecoin adoption has grown significantly in 2025, with the market cap rising above $300 billion. Tether and Circle dominate the space, but tokenized real-world assets have shown even faster growth, reaching $19.6 billion in total value.

The demand for privacy-focused solutions is also evident in the crypto security sector. DryRun Security, an AI-native code security intelligence company, has seen strong adoption of its tools, highlighting the need for secure development practices as more code is generated by autonomous agents.

What Analysts Are Watching

Analysts are closely monitoring the regulatory landscape as tokenization and privacy-focused solutions gain traction. The EU's MiCA framework is one of the most comprehensive regulatory regimes for crypto assets and is expected to influence global standards.

Investors are also watching for further innovation in tokenized equity products. BitMEX and other platforms are pushing into 24/7 trading of equity perpetuals, leveraging crypto collateral to enable continuous trading.

The impact of regulatory changes in Japan is another area of interest. Compass Point initiated a Buy rating for Coincheck, citing the potential for increased trading volumes following tax reforms in early 2026.

The broader adoption of blockchain infrastructure is supported by institutional interest in tokenization and privacy. As more companies and banks explore blockchain-based financial solutions, the industry is expected to mature significantly in 2026.

Andreessen Horowitz's focus on privacy reflects a broader industry trend. As users and institutions seek more control over their data and assets, the blockchain ecosystem is evolving to meet these demands with more secure, efficient, and private solutions.