Zac Williamson, the CEO of Aztec Network, believes future networks could be consistent with the goals of regulators while protecting user privacy. But it will not comply with the existing regulatory structures. He highlighted that regulators were wrong to ban Tornado Cash.
Williamson said a forward-thinking government would consider directly issuing base money onto networks like Ethereum. He outlined that when it’s coupled with hyper-fungible real-world assets, private self-custody, and low barriers to entry from open networks, there would be the dawn of a new financial renaissance. Williamson says hackers from North Korea or elsewhere will still use Tornado Cash or a clone, as a matter of fact, under the current sanctions regime. He pointed out that questionable entities will provide off-ramps to bad actors that have done the minimum required for plausible deniability.
But the executive believes there are grounds to be optimistic about the future of Web3. He says that in the near future, privacy networks could split into four – private by default; fully decentralized; user-side compliance; and open and programmable. Williamson said programmable privacy will create exponential growth opportunities for crypto and users can link encrypted identities to cryptocurrency accounts, and off-chain assets can be given and traded on-chain without custodial middlemen.
Furthermore, Williamson predicts a future in which user privacy needs and the openness of decentralized protocols will further lead to two distinct spheres. There would be compliant networks for applications and crypto assets that conform to the spirit of existing regulations; and dark networks for apps and digital currencies that have no compliance built in at the protocol level.