Zero knowledge proofs (ZKPs) are an extremely robust, privacy-enhancing tool that can prove a computational statement is true without revealing the data behind it.
While still at the early adoption stage, ZKPs are gaining traction as a potential solution to a vast array of privacy conundrums. These cryptographic building blocks have been used, for instance, to validate the occurrence of transactions on the blockchain without revealing the identity of the person(s) associated with that transaction. Financial institutions are exploring ways of incorporating ZKPs to preserve their clients’ privacy, including by using the technology to access fraud prevention systems that require a user’s age or enabling a client to prove their account balance is in excess of a certain figure, without revealing their bottom line. Other use cases include, for example, preserving client anonymity in online auctions or proving an individual meets eligibility requirements for membership to an entity without revealing superfluous personal information.
But there are challenges to its wider adoption; one notable obstacle being regulations. Anti-Money Laundering (AML) legislation such as Know Your Customer (KYC) obliges financial institutions to gather data on their customers. In such regulated sectors, what role can a privacy-enhancing tool like ZKPs play? What are the potential applications of ZKPs for financial institutions and clear limitations to their adoption? And what does the future look like for the wider adoption of ZKPs, within regulated sectors and beyond?
To answer these questions and attempt to boost mutual understanding between technologists and regulators, Least Authority’s CEO Liz Steininger hosted a panel discussion with Jack Gavigan, Head of Product and Regulatory Relations at Electric Coin Company, Nasim Jenkouk, a Lawyer at Annerton, and Raymond Yeh, a Software Engineer at Government Technology Agency.
You can view the full panel and a follow-up Q&A on YouTube by clicking on the video icons below.
Least Authority would like to thank the following partners for facilitating this discussion.