The evolution of blockchain technology is entering a pivotal stage as global institutions begin preparing for large-scale migration from private to public chains. According to Yair Lavi, Chief Financial Officer of the COTI Foundation, the first major institutional movement toward public blockchain environments will likely begin in 2026. This shift is not only technological but structural, marking a fundamental change in how organizations handle data, privacy, compliance and automation.
In a detailed interview during Binance Blockchain Week, Lavi explained why the next phase of blockchain adoption will require a new category of privacy infrastructure known as programmable privacy. Unlike traditional privacy models that prioritize anonymity, programmable privacy introduces selective, controlled and context-dependent confidentiality that integrates directly into advanced enterprise systems. As artificial intelligence, real-world assets and cross-chain ecosystems continue expanding, demand for these advanced privacy capabilities is intensifying at a rapid pace.
This article explores the reasoning behind Lavi’s timeline, the shortcomings of current zero-knowledge systems, how programmable privacy will shape enterprise and government adoption, and the broader implications for the blockchain ecosystem heading into 2026.
Why Institutions Will Move to Public Blockchains
Institutional interest in blockchain has grown steadily for years, but adoption has remained constrained by privacy, scalability and regulatory requirements. Lavi believes that a structural shift is now underway. Enterprises, central banks, financial institutions and medical organizations increasingly understand that they cannot rely on siloed privacy models, nor can they operate efficiently within solely private networks.
Lavi highlights that for many years the blockchain industry treated privacy as synonymous with anonymity. While anonymity suits some blockchain use cases, it cannot support mainstream enterprise adoption. Companies do not require hidden identities. Instead, they require the ability to reveal or conceal specific data elements depending on regulatory frameworks, compliance obligations, and operational needs.
In other words, the next generation of blockchain adoption depends on precision-controlled privacy rather than blanket anonymity.
This need becomes even more urgent when dealing with industries such as banking, healthcare, supply chain, insurance and government operations. These sectors cannot place sensitive data on public networks without safeguards. Yet they also cannot maintain private silos that block global interoperability.
The institutional vision for blockchain is becoming clear. They want access to public infrastructure and trustless execution, but only with privacy tools designed to meet real-world compliance and security standards.
Why Anonymity-Based Privacy Fails Institutional Requirements
Lavi explains that the privacy solutions dominating blockchain today are not sufficient for enterprise-grade operations. Traditional zero-knowledge systems were engineered to hide entire transactions or identities. But they do not support selective privacy at the application or workflow level.
Institutions require granular confidentiality. This means only specific portions of a transaction must be hidden, while the rest remains visible for auditing, validation or regulatory compliance. For example:
- A medical system may need to hide a patient name while exposing anonymous diagnostic data
- A bank may need to verify transaction authenticity without revealing customer information
- A corporate treasury may need to conduct cross-border settlements that disclose only what regulators require
These forms of selective disclosure cannot be executed with strict anonymity models. As Lavi emphasizes, privacy must evolve far beyond what most blockchains currently offer.
The next generation of privacy infrastructure must combine confidentiality with programmable logic so enterprises can define what is visible and what remains hidden across different stages of a workflow.
Garbled-Circuit Technology and the Next Privacy Breakthrough
While zero-knowledge proofs are powerful for many blockchain applications, Lavi argues that garbled-circuit technology is better suited for emerging workloads such as encrypted AI computation, high-volume medical data processing and confidential enterprise automation.
Garbled circuits allow machines to compute on encrypted data without exposing the underlying information. This enables fully secure workflows even when handling sensitive datasets. Unlike zero-knowledge systems, which often operate in limited scope, garbled circuits are optimized for heavy computational environments and large data structures.
This is critical for enterprise environments that generate massive datasets and require real-time analysis. Medical institutions, for example, cannot process patient data on open networks without enhanced confidentiality. Similarly, AI-driven finance systems require secure computation layers that protect internal models and corporate data.
COTI has already begun deploying these principles. According to Lavi, the foundation is working with a major hospital in Israel to pilot encrypted medical data processing. The project demonstrates the limitations of zero-knowledge systems for large datasets and highlights the need for computational privacy infrastructure capable of supporting artificial intelligence workloads.
The Rise of Programmable Privacy for Public Blockchains
Lavi insists that programmable privacy will become a foundational requirement as blockchain adoption accelerates. This privacy model allows developers, institutions and users to define rules for how information is shared, concealed and verified across blockchains.
Programmable privacy differs from older models in several important ways:
- It supports selective disclosure
- It operates across multiple chains
- It integrates with enterprise systems and AI models
- It enables encrypted computing at scale
- It maintains compliance while protecting sensitive data
Institutions will not adopt chain-specific privacy solutions. They do not want privacy tools that only function on a single blockchain. Instead, they need universal privacy infrastructure that operates across Ethereum, Solana, Cardano and other major ecosystems.
This is why COTI developed a chain-agnostic privacy layer. The system integrates directly with tools institutions already use, including MetaMask. Lavi emphasizes that the future of privacy is not tied to a single blockchain but will function across all major networks.
Why Enterprise Adoption Has Been Slow Until Now
Lavi describes the current state of enterprise blockchain adoption as a structural bottleneck. Institutions did not enter public blockchain environments because privacy solutions were inadequate. At the same time, developers could not fully understand enterprise privacy requirements because institutions were not active participants.
This created a self-reinforcing cycle:
- Institutions avoided public chains due to privacy limits
- Developers could not build proper privacy tools without institutional feedback
- Enterprises continued avoiding public chains due to lack of suitable tools
Lavi believes this stalemate will break in 2026. As real-world asset programs grow, as more ETF products gain regulatory approval and as central bank pilots expand, institutions will be forced into public blockchain infrastructures. Once they arrive, demand for programmable privacy will surge.
Stablecoins Will Accelerate Institutional Migration
Stablecoins already represent one of the fastest-growing sectors in blockchain. Their settlement volume grows at a rapid rate year after year. Lavi expects stablecoins to be the main driver of institutional blockchain adoption over the next two years.
Both banks and corporations increasingly rely on stablecoins for:
- Remittances
- Corporate treasury management
- Cross-border payments
- Automated settlement
- AI-driven financial systems
As the United States, European Union and the United Kingdom advance their regulatory frameworks for stablecoins, demand for privacy-enabled settlement layers will grow. Stablecoin payments require confidentiality to protect users, corporations and financial institutions. Without private settlement layers, broad institutional adoption cannot occur.
Programmable privacy fills this gap by enabling compliant confidentiality without sacrificing public-chain transparency.
The Impact of Real-World Assets and Central Bank Pilots
Real-world asset tokenization is expected to reshape global finance. Assets such as bonds, real estate, carbon credits, commodities and treasury products are already moving on-chain. These RWA programs cannot scale without secure and private data layers.
Central bank pilots also require programmable privacy. No central bank can issue digital currency on open public chains without privacy controls. The same applies to international settlement platforms such as cross-border CBDC networks.
Lavi suggests that these real-world use cases will ultimately force institutions to adopt public blockchain technologies. The scale, efficiency and interoperability of public chains far exceed private networks, making them the logical infrastructure for global financial systems.
The next major transformation of blockchain technology is approaching. According to COTI CFO Yair Lavi, institutions will begin adopting public blockchains in significant numbers starting in 2026. This shift demands a new category of privacy infrastructure capable of meeting enterprise requirements for compliance, selective disclosure and encrypted computation.
Programmable privacy will become a foundational layer as organizations transition from private silos to global blockchain ecosystems. With stablecoins expanding rapidly, real-world asset programs gaining traction, and central bank pilots increasing in number, the conditions are aligning for the most substantial migration in blockchain history.
Institutions will require universal privacy infrastructure that functions across Ethereum, Solana, Cardano and other major chains. Garbled-circuit technology and encrypted AI workloads will play central roles in enabling this transition.
As the industry prepares for this next phase, the importance of privacy, compliance, cross-chain interoperability and AI-driven computation will shape the blockchain landscape for years to come.
