Privacy emerges as crypto’s next ‘killer app’, according to Bitwise CIO Matt Hougan

Arc, Canton and Tempo, three blockchains focused on stablecoins and tokenization, have raised more than $1 billion combined, highlighting rising institutional demand for privacy-focused crypto infrastructure, according to Bitwise CIO Matt Hougan.

Stablecoin issuer Circle (CRCL) recently raised $222 million at a $3 billion valuation for Arc, while Digital Asset is reportedly raising $300 million at a $2 billion valuation for the Canton blockchain. Tempo, backed by Stripe and Paradigm, previously raised $500 million at a $5 billion valuation.

In a Tuesday blog post, Hougan said the fundraising wave reflects three trends: clearer U.S. regulation, growing demand for private blockchain transactions and rising competition from corporate-backed crypto networks.

Blockchains have long faced a trade-off between speed, cost and security: faster, cheaper networks often make compromises on decentralization or resilience, while more secure chains can be slower and more expensive to use.

That tension is especially important for stablecoins and tokenization, where institutions need transactions to be fast and affordable, but also private, compliant and secure enough for real-world finance.

Hougan said privacy could emerge as a “killer app” for crypto as businesses and consumers become less comfortable with fully transparent blockchains like Ethereum and Solana.

“If you’re a business broadcasting every trade before it’s complete, or a worker whose paycheck is visible to anyone with a block explorer, that transparency is a bug, not a feature,” Hougan said.

He added that the fundraising boom also reflects growing confidence after Congress passed the Genius Act in 2025, giving institutions a clearer regulatory footing to invest in crypto infrastructure.

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