Ethereum News Today: ZKsync Expands in Latin America With LNET to Deploy Private Blockchain for Governments

ZKsync, a leading Ethereum Layer-2 scaling solution, has expanded its footprint in Latin America through a strategic partnership with LNET, a nonprofit blockchain infrastructure builder. The collaboration aims to deploy privacy-focused blockchain systems for governments and institutions, focusing on Results-Based Finance (RBF) programs. ZKsync's zero-knowledge (ZK) proof technology enables verifiable outcomes without exposing sensitive data, a critical feature for RBF initiatives where transparency and confidentiality must coexist according to a report.

The partnership underscores a broader industry trend where blockchain technology is being leveraged to modernize public finance systems. LNET, which previously operated under LACChain and LACNet, brings a strong regional presence to the collaboration, supporting ZKsync's push into institutional markets. The alliance is expected to enhance the scalability and privacy of government financial programs, particularly in a region where blockchain adoption is accelerating.

ZKsync's move into Latin America follows a strategic shift in the company's token model, transitioning the ZK token from a governance-only asset to one tied to network economics. This realignment reflects growing demand for token utility in decentralized systems, especially in regions where blockchain can offer tangible benefits such as data privacy, faster settlements, and institutional-grade infrastructure according to industry analysis.

A Strategic Push into Institutional Markets

ZKsync's collaboration with LNET highlights the growing institutional interest in blockchain-based financial systems. The partnership will deploy ZKsync's Prividiums, which are private ZK chains designed for institutional use. These chains allow secure and confidential execution of financial programs, with final proofs settling on the Ethereum mainnet. This dual-layer approach supports compliance while maintaining the benefits of decentralized verification according to technical documentation.

LNET's Chief Commercial Officer, Melody Celestine, emphasized the importance of data privacy in public finance programs. Governments require the ability to verify outcomes without exposing citizen or agency data. ZKsync's technology enables this through zero-knowledge proofs, which allow verification without revealing the underlying data. This capability is especially valuable in RBF programs, where subsidies are tied to verifiable results according to industry experts.

The deployment of ZKsync's technology in Latin America also aligns with the region's growing appetite for blockchain solutions. Countries across the region have been exploring ways to use blockchain for everything from cross-border payments to government oversight. With inflationary pressures and currency instability, blockchain-based systems offer a way to streamline financial processes and reduce intermediation according to regional reports.

Institutional Demand and Competition Among L2s

The ZKsync-LNET partnership is part of a larger shift in the blockchain landscape, where Layer-2 solutions are increasingly competing for institutional business. While Ethereum remains the dominant layer for smart contract execution, the need for privacy, scalability, and compliance is driving demand for specialized Layer-2 networks. ZKsync's focus on institutional-grade infrastructure positions it well in this space, especially as it transitions the ZK token to a utility model according to market analysis.

The region's rapid adoption of blockchain is also being fueled by major financial institutions and corporations. For example, Wall Street giants like DTCC have begun developing tokenized collateral platforms to improve operational efficiencies and reduce settlement times. Similarly, companies like Paxos are acquiring wallet startups to expand custody services and support the growing institutional appetite for on-chain asset management according to financial reports.

ZKsync's expansion into Latin America also comes as other projects are making significant strides in the space. Mutuum Finance, a decentralized lending protocol, has raised nearly $20 million in investor participation, with over 19,000 holders. The project's mtToken system allows users to earn yield based on interest repayment, creating a natural APY mechanism that is attracting attention in the DeFi space according to project announcements.

What This Means for Investors and the Market

For investors, the growing adoption of ZKsync and other Layer-2 solutions signals a maturing blockchain ecosystem where institutional demand is outpacing consumer-driven use cases. The transition of the ZK token from governance to utility could also impact its valuation, as token economics become more directly tied to network usage and transaction fees. This shift could attract more institutional interest, particularly in markets where blockchain is being used to modernize public finance.

The ZKsync-LNET partnership also highlights the importance of privacy-preserving infrastructure in blockchain adoption. As governments and institutions deploy more blockchain-based programs, the need for confidential yet verifiable systems will increase. ZKsync's zero-knowledge approach offers a compelling solution, allowing stakeholders to confirm outcomes without exposing sensitive data.

Looking ahead, ZKsync and LNET plan to pilot RBF systems with government partners before expanding to broader institutional use cases. Documentation and Prividium rollout details are expected in early 2026, setting the stage for wider adoption of the platform in the region according to official statements. With Latin America emerging as a key market for blockchain innovation, the partnership could serve as a model for other Layer-2 solutions seeking to scale in institutional markets.