What Institutions Actually Need From Blockchain — Transcript

All right, everyone, check out this clip from the Digital Asset Summit 2026 in New York.

“What are the characteristics of a chain to support traditional financial instruments? And so, you know, privacy is one of the things, you know, lack of front running ability is another. So, you know, MEV, that ability for people to reorder transactions, to extract value, which is something that happens on top of Ethereum and Solana, again, I mean, that’s just not suitable for financial markets.”

Did you catch that? Banks don’t just want speed. They want privacy, compliance and protection from things like front running. And that’s exactly where public chains like Ethereum and Solana start running into problems.

So today, I’m going to break down what institutions actually need from blockchain and where gaps are and why Cardano and Midnight keep showing up in these conversations. Let’s get into the details here.

Hi everyone, I’m Peter and if it’s your first time here, make sure you hit that thumbs up, like, subscribe, notification bell. I talk all things crypto, Cardano, Midnight. I’m an ambassador for Cardano and Midnight, and I love keeping you guys up to date with everything that’s happening in the ecosystem. So let’s get into it here.

Separating Marketing From Requirements

Now, the first thing we need to do is separate the marketing story from what institutions actually require. Because when people say “banks want crypto,” that could mean a hundred different things. But if you talk to people who are actually building in finance, what they actually need comes down to three main things.

One, privacy and selective disclosure. They need to control who sees what. A bank can’t put customers’ transactions on a public ledger. They need the ability to hide sensitive details from the public, but still prove compliance to a regulator when required. That’s selective disclosure.

Two, execution predictability. They need to know that when they submit a transaction, it’s going to go through. No failed transactions, no one front running their order, no MEV extraction — extracting value before their trade even settles. And this is very common in Ethereum, EVM chains, and Solana.

Now for those that don’t know, MEV — maximal extractable value — is basically a hidden tax on public chains. Validators or bots can see your pending transaction in the mempool, in the memory of the blockchain, and reorder the queue and profit off you before your trade even lands. For institutions moving serious value, that’s a complete deal breaker. They could be moving two, three billion dollars in one simple transaction, and someone can see that it’s happening and extract the value from that. And that’s just not how a bank wants to work.

Three, compliance tooling. They need to meet AML, KYC, and regulatory requirements without broadcasting all that sensitive information to the entire world. They need one view for internal operations, another for regulators, another for counterparties. And none of those views should expose more than what is required.

So it’s not about which chain is fastest. A bank isn’t going to move billions onto a chain just because it can do a lot of transactions per second. They’re asking: who can see the transaction, who can manipulate the order, and can we stay compliant without exposing our entire business model.

The Structural Problem With Ethereum and Solana

Now I want to be fair here. Ethereum and Solana are both massive ecosystems. They’ve got liquidity, developers, brand recognition, all of that. I’m not saying they’re bad chains — that’s a bit too simplistic. What I’m saying is that they share structural problems when it comes to institutional banking.

They’re public by default. On Ethereum, every transaction, every balance, every movement is visible. That’s the design. And for a lot of crypto use cases, that’s perfectly fine. But for a bank moving clients’ funds, or a hedge fund building a position, or a corporation running payroll, that transparency becomes a liability.

And then you layer on MEV. On Ethereum especially, transaction ordering can be exploited. Bots can front-run trades. For institutions, that’s not some edge case they can ignore — that’s a direct cost on every large transaction.

Solana has been pushing hard into institutional conversations, and it’s fast, no doubt. But speed doesn’t solve the privacy problem. If the chain is public by default, you’ve still got the same fundamental issue. Every transaction is visible, every counterparty is exposed, and there’s no native way to selectively disclose information to a regulator without showing it to the whole world.

So both chains have the ecosystem, they both have momentum, but neither has a native answer to the privacy and compliance requirements that regulated institutions actually need. And that’s the big gap.

Where Midnight Fits In

Now this is where Midnight gets really interesting. Because Midnight isn’t trying to be another fast chain — it’s not competing on TPS, transactions per second. It’s solving the thing that institutions actually care about: programmable privacy.

And I want to be specific about what that means, because “privacy” gets thrown around a lot in crypto, and it usually means hidden. That’s not what we’re talking about here. Programmable privacy means that you can have transactions that are private where they need to be private, but still provable where they need to be provable. So instead of choosing between everything being visible and everything being hidden, you can get something that’s actually useful for the real world.

Example: Tokenised Bonds

So let me give you a concrete example here. Say a hedge fund buys $50 million worth of tokenised bonds. On Ethereum, everyone sees that trade. The market sees the position, competitors see the strategy, and bots can front-run the next move. That’s an absolute nightmare situation for institutions.

On Midnight, the counterparty can actually verify that the transaction happened. The regulator can audit the compliance — they can confirm the fund is operating within the rules. But the market never sees the position. The public never sees the counterparty. The sensitive data stays private.

That is selective disclosure in practice. The fund proves it’s compliant without exposing its strategy. The regulator gets the view they need without everything being broadcasted to the world.

And here’s the thing — this isn’t theoretical. This is the kind of architecture that Midnight is delivering right now. Mainnet launch at the end of March. We’ve got Monument Bank already partnered for tokenised deposit workflows. We have Google, Blockdaemon are a part of the validator set. This is seriously real infrastructure being built for real institutional use cases.

Example: Payroll

Now another use case that’s really practical is payroll. Imagine a company running payroll on-chain. On a public chain, salary is visible to every other employee and the entire world. That’s obviously not going to fly.

But with Midnight, the company can process payroll on-chain. Employees can verify that they have received the payment. The tax authorities can audit the compliance. But nobody sees who got paid what. And that’s how privacy needs to work in the real world.

And all of this is built using zero-knowledge proofs. So you’re not trusting a middleman to keep things private. The privacy is enforced by maths and by cryptography. You don’t share the secrets — you prove them.

The Bigger Cardano Picture

Now this is the part I think people sometimes miss. Midnight doesn’t exist in isolation. It’s a partner chain to the Cardano ecosystem. And when you look at the full picture of what Cardano is building in 2026, you start to see why it keeps coming up in institutional conversations.

You’ve got the L1 — 100% uptime since inception, most decentralised proof-of-stake network out there. You have Leios for scaling coming in, Layer 0 connecting Cardano to over 80 other blockchains, USDX for institutional-grade stablecoin liquidity and privacy baked in. We have Pyth for Tier 1 Oracle data, and of course, Midnight for privacy and compliance.

If you want a full breakdown of how all these pieces fit together, I did a dedicated video on that — in the top right-hand corner there for you guys.

But the point is this: Cardano’s value proposition has always been different. Research first, more deliberate, more focus on correctness and doing things properly rather than moving fast and hoping it works. And that approach tends to matter a lot more when you’re talking to institutions than it does with retail hype cycles. Institutions care about reliability, verifiability, and long-term stability — those are Cardano’s strengths.

So where Ethereum and Solana are trying to convince institutions to work around the privacy problem — build layers on top, bolt things on — Cardano and Midnight are more like, “Here’s the privacy layer that you actually need, built in from the start.” And that’s a very different pitch. I think it’s going to resonate more and more as institutions get serious about what they actually need from blockchain infrastructure.

Outro

Now I’d love to know what you guys think about this one. Do you think institutions will eventually just build privacy on top of Ethereum and Solana? Or do you think they’ll move towards networks that have privacy built in from the ground up? Because I think that’s the real question here. Drop your thoughts in the comments down below — I read through all of them and I use your comments in future videos as well.

If this video has helped you in any way, make sure you hit that thumbs up, like, subscribe, notification bell. I do these videos on a regular basis to keep you guys up to date with everything that’s happening in the space. I don’t get paid for any of this, and all my revenue primarily comes from YouTube ads. And if you want to support the channel, you can do so by becoming a member — we’ve got links down below. We’ve got Buy Me a Coffee links here too. If you can’t, no worries, that’s totally cool. Just hit that like button and leave a comment — works wonders with the algorithm.

I’m Peter, stay optimistic guys, and I’ll see you in the next video.