Why Privacy-Enhancing Technologies (PETs) Are the Next Institutional Infrastructure Moat in Crypto

The crypto industry is at a pivotal inflection point. As institutional adoption accelerates, the demand for infrastructure that prioritizes privacy, scalability, and regulatory compliance is becoming non-negotiable. Privacy-Enhancing Technologies (PETs) are no longer niche experiments-they are foundational to building trust, enabling cross-chain interoperability, and securing institutional-grade utility. Projects like Zama, Anoma, and Boundless are emerging as critical players in this space, leveraging institutional partnerships, cutting-edge cryptography, and strategic regulatory alignment to cement their roles as infrastructure moats.

The Institutional Imperative for Privacy

Institutional investors and enterprises are increasingly prioritizing privacy as a core requirement for blockchain adoption. Public transparency, while a hallmark of Web3, exposes sensitive financial data, trade strategies, and user identities-risks that institutional players cannot afford. According to a report by Token Metrics, privacy is now "the most important moat in crypto" for institutional actors, with venture firms like a16z and Coinbase Ventures explicitly doubling down on privacy-first protocols. This shift is driven by practical needs: hedge funds, asset managers, and corporations require confidentiality to operate effectively in a transparent ecosystem.

Moreover, regulatory scrutiny is intensifying. For example, the CEMAC region-a key market for emerging crypto adoption-has seen a 45.99% surge in transaction volume since 2023, but it remains under strict oversight by the Central African Banking Commission (COBAC), which prohibits banks from engaging in crypto transactions. Projects that integrate robust anti-money laundering (AML) and data protection protocols from the outset are better positioned to navigate such regulatory landscapes.

Zama: Scaling FHE for Institutional Finance

Zama, a leader in Fully Homomorphic Encryption (FHE), has emerged as a critical infrastructure player for privacy-driven finance. In 2024 and 2025, Zama secured $73 million in Series A funding led by Multicoin Capital and Protocol Labs, followed by a $57 million Series B round co-led by Blockchange and Pantera Capital, pushing its valuation above $1 billion. This funding has enabled Zama to develop FHE-based solutions for financial applications, including encrypted stablecoin transfers and private DeFi protocols.

Zama's focus on the CEMAC region is particularly strategic. With transaction volumes surging and micropayments becoming mainstream, the region's demand for privacy-preserving infrastructure is growing. Zama's partnerships with blockchain ecosystems and its alignment with COBAC's compliance requirements position it to dominate institutional-grade privacy use cases in Africa and beyond.

Anoma: Intent-Centric Privacy for Cross-Chain Interoperability

Anoma's intent-centric architecture is redefining how privacy is integrated into cross-chain transactions. The project has raised $57.8 million across seed, Series A, and Series B rounds, with insiders hinting at a potential $1 billion valuation in a new funding round. Its partnership with Uphold Institutional-a custody platform managing $9 billion in assets-highlights its appeal to institutional players seeking privacy in DeFi and CeFi pipelines.

Anoma's roadmap includes protocol adapters for multi-chain deployment, AnomaPay for institutional stablecoin routing, and expansion to high-liquidity chains like Bitcoin and Solana. Collaborations with Zama (FHE) and Boundless (zkVM) further strengthen its privacy stack, creating a modular infrastructure that addresses both scalability and confidentiality. These developments align with the growing demand for cross-chain privacy, a necessity for institutions operating across fragmented blockchain ecosystems.

Boundless: Verifiable Computing and Institutional Backing

Boundless has carved a unique niche in the privacy space by focusing on verifiable computing and zero-knowledge (ZK) infrastructure. Despite confusion with unrelated entities like Boundless Bio, the Boundless privacy protocol has secured institutional backing from the Ethereum Foundation, Base, Wormhole, and EigenLayer. These partnerships have accelerated its mainnet launch, which now supports over 30 protocols, enhancing cross-chain interoperability and institutional utility.

A notable milestone was Boundless' collaboration with Kaito, where 0.25% of its ZKC token supply was allocated to creators, mobilizing $36 million in USDC commitments. This demonstrates the protocol's ability to attract institutional liquidity while maintaining privacy-centric design principles. Boundless' Proof of Verifiable Work model also addresses scalability challenges, making it a compelling infrastructure moat for institutions seeking to balance privacy with performance.

Regulatory Tailwinds and Market Validation

While the CEMAC region remains restrictive, broader regulatory trends are shifting. In 2025, the CEMAC zone introduced a legal framework for virtual asset services, signaling a step toward legitimizing crypto infrastructure. Globally, privacy regulations are converging, with the U.S. Department of Justice implementing rules to prevent foreign access to sensitive data. Projects like Zama, Anoma, and Boundless are proactively aligning with these trends, ensuring compliance while expanding their institutional reach.

Conclusion: PETs as a Strategic Investment

Privacy-Enhancing Technologies are no longer optional-they are table stakes for institutional adoption. Zama, Anoma, and Boundless are leading the charge, combining institutional partnerships, regulatory foresight, and cryptographic innovation to build infrastructure that meets the demands of a maturing market. As venture capital firms and institutional investors increasingly prioritize privacy, these protocols are positioned to become the bedrock of the next crypto cycle.

For investors, the message is clear: foundational privacy protocols are not just speculative assets-they are essential infrastructure for the future of institutional-grade blockchain adoption.