The privacy coin sector expanded nearly fivefold over the past year and reached approximately $30 billion, according to a September 22 research note from 21Shares. Zcash led the rally, while financial institutions continue testing privacy-focused blockchain infrastructure. According to the asset manager, the sector rose from $6.2 billion a year earlier and is trading 216% above its October 2025 peak based on the firm's own dataset.
Key figures: growth from $6.2 billion to $30 billion according to 21Shares; CoinGecko values the category at $36.9 billion (Zcash ~$25 billion, Monero ~$11.2 billion); Zcash shielded pools hold 4.91 million ZEC — 29% of the supply (~$7.19 billion); Grayscale's ZCSH ETF attracted more than $70 million during its first two weeks of trading.
At the time the research was prepared, 21Shares valued Zcash's market capitalization at approximately $20 billion and described privacy as an increasingly important requirement for institutional blockchain adoption. “Privacy is not a feature that digital assets can bolt on later,” wrote 21Shares research strategist Matt Mena, pointing out that public transaction histories can expose corporate balances, counterparties and trading strategies.
Independent market data captured later on September 22 showed that the rally had gone even further. CoinGecko displayed the privacy coin category at approximately $36.9 billion: Zcash was close to $25 billion and Monero around $11.2 billion. The figures are not directly interchangeable because 21Shares and CoinGecko use their own category definitions and market snapshots. Separately, CoinGecko values the broader privacy category, which includes privacy infrastructure and other related networks, at more than $60 billion.
Zcash made the largest contribution to the recent growth among specialized privacy coins. According to CoinGecko data as of September 22, ZEC was trading at around $1,473 with a market capitalization close to $25 billion: up approximately 22% over seven days and 75% over the previous 30 days. These figures were significantly above the $20 billion valuation used in the 21Shares report. The firm's research compared the current value with Zcash's peak of around $4 billion in 2021: the network had risen approximately 400% above that level.
The price increase was accompanied by growth in the amount of coins held in Zcash shielded pools. ZecStats reported that at 05:34 UTC on September 22, shielded pools contained 4.91 million ZEC — 29% of the issued supply, worth approximately $7.19 billion at the prevailing price. The 29% figure measures the share of the supply held in shielded pools, not the share of private transactions: ZecStats counts the Sprout, Sapling, Orchard and new Ironwood pools, with Ironwood activated on July 28 after replacing the vulnerability-affected Orchard construction.
Zcash activated Ironwood through the NU6.3 upgrade after developers discovered a soundness vulnerability in Orchard earlier this year; Project Tachyon subsequently published machine-verified proofs of Ironwood's balance integrity before activation. Users then migrated a significant portion of the shielded balance into the replacement pool.
21Shares argues that demand for privacy extends beyond tokens built specifically around privacy. Ethereum's official roadmap describes three tracks: private reads (protecting against leakage of wallet and provider queries), private writes (concealing transaction activity and metadata) and private proving (cryptographically proving facts without revealing the underlying data). The Ethereum Foundation created an Institutional Privacy Task Force alongside the Privacy and Scaling Explorations group: the institutional portal describes work on zero-knowledge proofs, fully homomorphic encryption, trusted execution environments and privacy-focused Layer 2 solutions for regulated financial applications. Privacy has entered the priorities for the Hegotá cycle alongside Frame Transactions, censorship resistance and post-quantum work, although timelines may change during technical review and the consensus process.
Solana already provides Confidential Balances through the Token-2022 framework: the feature encrypts balances and transfer amounts while leaving token accounts, owners and participation publicly visible. Issuers can configure an optional auditor key that decrypts confidential transfer amounts; according to Solana documentation, it does not reveal the full balance and cannot authorize transfers.
| Platform | Privacy Approach | Status |
|---|---|---|
| Ethereum | Private reads, writes, proving; ZK, FHE, TEE | Roadmap, Hegotá cycle |
| Solana | Confidential Balances (Token-2022) | Available today |
| Canton Network | Controlled disclosure between participants | DTCC production tests |
Institutional privacy takes a different form on Canton Network, which is built around controlled information sharing. In an August 17 letter to the SEC, Digital Asset said Canton has more than 1,000 participants and supports over $8 trillion in tokenized securities activity each month; named users include Broadridge, Goldman Sachs, HSBC and Société Générale. The $8 trillion figure describes monthly financial activity and does not represent permanently held assets on a public blockchain. On July 15, DTCC reported successful production transactions involving tokenized DTC securities through Canton and a private Besu network: more than 30 firms participated in workflows covering U.S. Treasury repo, securities lending, collateral, equities and delivery-versus-payment. The launch of DTCC's Tokenization Service is planned for October 2026; Canton has also attracted banks developing tokenized deposits, including projects involving JPMorgan.
21Shares used crime data to challenge the view that privacy assets account for most illicit cryptocurrency activity. Chainalysis estimated that illicit addresses received at least $154 billion in cryptocurrency in 2025, while attributed illicit transactions remained below 1% of total crypto transaction volume. Stablecoins accounted for 84% of identified illicit volume in the firm's 2026 report — partly because of their extensive legitimate use, high liquidity, low volatility and cross-border transfer capabilities. The data does not measure whether any particular privacy coin is free from criminal use.
Regulatory treatment continues to vary by jurisdiction. The European Union's anti-money laundering regulation prohibits crypto-asset service providers from maintaining anonymous crypto accounts or accounts that allow enhanced transaction obfuscation through anonymity-enhancing coins. The provision applies from July 10, 2027, when the EU's new AML regulation takes effect for covered financial and crypto service providers. For institutions, this creates a mixed picture: demand for confidentiality is growing alongside the infrastructure, while compliance frameworks in the EU are narrowing the space available for anonymous instruments.
The combination of factors — the sector's fivefold growth, a record share of Zcash supply held in shielded pools, the first U.S. spot ETF and privacy initiatives across major L1 networks — indicates that privacy is evolving from a niche feature into an infrastructure requirement. The question for the coming year is not whether the market needs privacy, but which of the proposed models — shielded pools, confidential balances or controlled disclosure — will become the standard for regulated financial applications.
“Arguing that you don't care about the right to privacy because you have nothing to hide is no different than saying you don't care about free speech because you have nothing to say.”
— Edward Snowden, privacy advocate and former NSA contractor
