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Opinion: The U.S. Treasury's change in attitude may bring new opportunities for the crypto privacy sector

According to DL News, the U.S. Treasury Department has, for the first time in its latest congressional report, acknowledged that privacy tools such as token mixers can serve legitimate financial privacy purposes. The wording has softened significantly compared to previous statements and is seen as the latest signal of the Trump administration's ongoing easing of regulatory attitudes towards the cryptocurrency industry.Jake Kennis, a senior research analyst at Nansen, pointed out that three forces—political tensions, tightening regulations, and the maturity of zero-knowledge (ZK) technology—are driving the privacy sector from a fringe speculative area into mainstream institutional themes. Currently, capital is accelerating towards compliant privacy projects such as Railgun, Nocturne, Zama, Aleo, and Nillion, covering scenarios like tokenization, payments, trade finance, and custody.However, risks cannot be ignored: the Treasury report also disclosed that North Korean hackers laundered billions of dollars through mixers between 2024 and 2025; the European Union also plans to ban exchanges from listing privacy coins like Zcash and Monero by 2027. Meanwhile, developers of privacy tools such as Tornado Cash and Samourai Wallet have faced legal prosecution in the U.S. and Europe, with compliance pressure in the industry continuing to rise.

Aave founder: RWA is the biggest opportunity for DeFi in recent times, but we must be wary of institutions using DeFi as a liquidity exit channel

Aave founder Stani.eth posted on the X platform, stating, "The private credit market is facing pressure in a high-interest-rate environment. Since the Federal Reserve began its rate hike cycle in 2022, interest rates have rapidly risen above 5% and remained high, leading to a significant increase in capital costs for borrowing businesses and consumers.Recent data shows that several funds have experienced stock price declines and redemption pressures, such as Blue Owl Capital, which has dropped about 50% over the past year, and Blackstone's BCRED, which is facing approximately $3.7 billion in redemption requests in Q1 2026. The average BDC is trading at about a 20% discount, with yields of 10-11%, and some funds have seen default rates rise to 9%.Stani.eth proposed three risk scenarios: a single fund default can be absorbed by the system, multiple fund defaults may trigger a downturn in the credit cycle, and a complete collapse could lead to systemic risk. However, the overall private credit market has a total size of about $1.8-2 trillion, making a single fund default unlikely to cause a systemic crisis.For DeFi investors, the biggest risk is that many retail users do not understand the risks involved before putting funds into high-yield RWA. I believe RWA is the biggest opportunity for DeFi in the near term. However, my biggest concern is that institutional speculators may view DeFi as a channel to offload illiquid and distressed products that Wall Street has lost confidence in, effectively using DeFi participants as an exit liquidity.However, well-functioning on-chain private credit can provide advantages that traditional finance cannot reach. DeFi can enforce redemption windows, withdrawal limits, collateral ratios, and profit distribution rules through smart contracts, achieving transparent and immutable execution, avoiding arbitrary tightening of redemption policies by traditional fund managers. Through carefully structured RWA projects, transparent and secure investment channels can be provided between traditional finance and on-chain markets. DeFi should not become a source of exit liquidity for Wall Street."

The negotiations for the "Clarity Act" have entered a critical window period, with deep involvement from the White House becoming a unique variable

Kristin Smith, president of the Solana Policy Institute, recently shared her views on the legislative progress of the Clarity Act. She stated that although the bill faces resistance due to the withdrawal of support from Coinbase CEO Brian Armstrong and controversies in the banking sector, its complexity determines the long-term nature of the legislative process. Current negotiations exhibit two new characteristics: first, senior officials from the White House are directly involved, with presidential aides like David Sacks pushing for dispute resolution; second, traditional financial institutions are participating in negotiations for the first time.If the Senate Banking Committee can complete its review of the bill by March or April, there is hope to advance the legislation before the July recess; otherwise, the next window will not open until the fall. Smith, who previously led the Blockchain Association and spearheaded the passage of the Genius Act, believes that despite facing opposition from figures like Elizabeth Warren, the support from key Democrats such as Chuck Schumer and the ongoing pressure from President Trump are changing the odds of the bill's passage. On Wednesday, after Trump urged the banking sector to make concessions in a post on Truth Social, expectations in the market for the passage of cryptocurrency legislation within the year have noticeably increased.

Vitalik calls on the Ethereum community to shift their mindset, adhere to core principles, and rethink application design from scratch

Ethereum founder Vitalik stated, "I think it's a good thing for the Ethereum community to have a bolder and more open mindset, especially regarding the application layer and how we view our place in the world. We should not compromise on core attributes: censorship resistance, open source, privacy, and security (CROPS). Especially at the application layer and in the interface between Ethereum and the outside world, we should be more willing to thoroughly rethink various concepts and step out of our comfort zone.Last year, we began to prioritize privacy and give it equal importance to other types of security. This means that the Ethereum application stack will undergo fundamental changes, as the entire stack has not been built around privacy so far. Great, let's build a completely different Ethereum application stack. An example this year is rethinking the role of L2 from scratch and determining which types of L2 can truly create the greatest synergy and benefits with Ethereum. This also includes cultural factors.For me and others, this is an important part of the "milady" concept. Write down your inherent notions of "decency," crumple them up, and burn them. This mental cleansing will lead to an intellectual cleansing, thereby sparking greater creativity and broadening perspectives. For a long time, our algorithm on Ethereum has been: we have an existing ecosystem, what should we do next to make it better? Now, our algorithm should be: we have a fantastic L1 layer, and it will become even better; we have more and more tools, including those developed inside and outside the ecosystem; based on what we currently know, what is the most valuable?If you were to write the section on applications from the 2014 Ethereum white paper, starting from first principles in areas like DeFi, decentralized social, and identity verification, what would you write? At the very least, please exclude all path dependency issues, assuming the Ethereum chain is currently unused, and you are the first to propose or build the first applications, and see what you would ultimately write. Even if you are currently building existing applications, please do this. This is the secret to revitalizing Ethereum."
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