Blockchain-based payment systems are entering a new phase, where companies and financial institutions can now make private transactions while still using public blockchain networks.
This development is seen as a major milestone in global digital payments, as it combines the speed and cost efficiency of public blockchains with the confidentiality required by large organizations.
Latest Development in Blockchain Payments
Blockchain infrastructure firm StarkWare recently introduced a privacy solution that enables institutions to conduct confidential transactions on public blockchain networks.
The privacy layer integrated into the system was developed by global consulting firm Ernst & Young, allowing payments to remain private while still meeting regulatory and audit requirements.
This privacy feature has been integrated into Starknet, a Layer-2 scaling network designed to make blockchain transactions faster and cheaper.
The Problem with Public Blockchains Until Now
Public blockchain networks, including those supported by the Ethereum Foundation, are fully transparent.
This transparency means:
- Transaction details can be viewed publicly,
- Wallet movements can be tracked,
- Payment amounts can sometimes be analyzed.
While this openness is useful for decentralization, it creates problems for companies and banks that need confidentiality in business payments.
How the New Technology Solves This
The solution uses advanced cryptography known as Zero-Knowledge technology, which allows transactions to be validated without revealing sensitive details.
This makes it possible to:
- Keep transaction information private,
- Maintain security and transparency at the network level,
- Allow regulators or auditors to access details only when required.
In short, businesses now get both privacy and the efficiency of public blockchain infrastructure.
How the System Works
Under this new setup:
- Payments are processed on a public blockchain network.
- Transaction details are encrypted and remain private.
- The network verifies the payment without revealing sensitive data.
- Authorized parties can access transaction data if necessary.
This keeps payments secure while benefiting from blockchain’s speed and low cost.
Where This Technology Will Be Used
The innovation opens doors to multiple real-world applications:
Business-to-Business Payments
Companies can make private payments to partners and suppliers.
Cross-Border Transactions
International payments can become faster and cheaper.
Corporate Treasury Transfers
Multinational firms can move funds between offices securely.
Digital Asset Transfers
Tokenized assets and digital securities can be transferred confidentially.
Banking and Financial Services
Banks may begin using blockchain infrastructure for settlement and payments.
What This Means for Everyday Users
Although currently focused on institutions, the impact may eventually benefit regular users through:
- Faster global money transfers,
- Lower transaction costs,
- Improved digital banking services,
- Quicker payment settlements.
Why This Is Considered a Major Milestone
Until now, blockchain systems were split into two models:
- Private blockchains offering confidentiality but limited reach,
- Public blockchains offering global access but little privacy.
This new development combines both advantages, enabling private payments on public networks.
What Could Happen Next?
Experts believe the following trends may emerge:
- Banks and large corporations adopt blockchain payments,
- Traditional payment networks face competition,
- Growth in stablecoins and tokenized financial assets,
- Real-time global settlement systems become common.
Outcome
The arrival of private blockchain payments on public rails marks a significant shift in financial technology. Companies can now conduct secure and confidential transactions while enjoying the efficiency and global connectivity of public blockchain networks.
This move brings blockchain technology closer to mainstream financial infrastructure and could reshape the future of global payments.
Source: prnewswire starkware
