The privacy coin market has grown from $6.2bn to about $30bn in a year, according to research by 21Shares, with Zcash accounting for most of the recent gains as financial institutions continue to test confidential blockchain systems.
The asset manager said the sector was trading 216% above its October 2025 peak, based on its own dataset. When the research was prepared, 21Shares valued Zcash at about $20bn and said privacy was becoming increasingly important for institutional blockchain use.
“Privacy is not a feature digital assets can bolt on later,” 21Shares research strategist Matt Mena wrote. He said public transaction histories could reveal corporate balances, counterparties and trading strategies.
Market data published later on 22 September by CoinGecko put the wider privacy-coin category at approximately $36.9bn. Zcash represented close to $25bn of that figure and Monero about $11.2bn.
The figures are not directly comparable because 21Shares and CoinGecko use different category definitions and market snapshots. CoinGecko separately values its broader privacy category, which includes privacy infrastructure and other related networks, at more than $60bn.
Zcash drives the market’s growth
CoinGecko’s 22 September data placed ZEC at about $1,473, giving Zcash a market capitalisation close to $25bn. The token had risen by roughly 22% over seven days and 75% over the previous 30 days.
That valuation was above the approximately $20bn figure used in the 21Shares report. The firm compared Zcash’s market value with its roughly $4bn peak in 2021 and said the network was about 400% higher than that earlier level.
The rally has coincided with more ZEC being held in shielded pools. ZecStats reported that 4.91 million ZEC, equivalent to 29% of the issued supply, was shielded at 05:34 UTC on 22 September. At the prevailing price, those coins were worth about $7.19bn.
The 29% figure measures the proportion of issued ZEC held in shielded pools, rather than the percentage of transactions using privacy. ZecStats includes the Sprout, Sapling, Orchard and Ironwood pools in its calculation.
Ironwood became active on 28 July after developers replaced the affected Orchard design. Zcash activated it through the NU6.3 upgrade after a soundness vulnerability in Orchard was discovered earlier in the year. Project Tachyon later published machine-checked proofs covering Ironwood’s balance integrity before its activation.
The vulnerability had raised concerns about the integrity of the coin’s supply. Users subsequently moved much of the shielded balance into the replacement pool.
Zcash gains regulated US access
Grayscale’s Zcash ETF began trading on NYSE Arca under the ticker ZCSH on 25 August, providing the first exchange-traded product offering spot exposure to ZEC.
Grayscale said ZCSH was created by converting its existing Zcash Trust. The fund allows investors with brokerage accounts to gain price exposure to ZEC without managing private keys.
An SEC filing showed cumulative inflows of more than $70m during the ETF’s first two weeks, excluding a separate $100m investment by an affiliate of Digital Currency Group. Grayscale warned that ZEC remained highly volatile and that investors could lose their entire investment.
The SEC terminated its investigation or enforcement action involving the Zcash Foundation in January 2026, according to Grayscale’s filings. The documents do not show that the end of the investigation caused or guaranteed the later approval of ZCSH.
Blockchain platforms develop privacy tools
21Shares said interest in confidentiality was expanding beyond assets specifically designed as privacy coins.
Ethereum’s roadmap includes private reads, private writes and private proving. The first is intended to prevent wallets and infrastructure providers from exposing query information; private writes concern transaction activity and metadata; and private proving uses cryptography to verify facts without revealing the underlying data.
The Ethereum Foundation has also established an Institutional Privacy Task Force alongside its Privacy and Scaling Explorations research group. Its institutional portal refers to work involving zero-knowledge proofs, fully homomorphic encryption, trusted execution environments and privacy-focused Layer 2 networks for regulated financial applications.
The proposed changes are not guaranteed to reach Ethereum’s mainnet. The Foundation says timelines may change during technical review and the consensus process. Privacy is among the priorities for the Hegota development cycle, alongside censorship resistance and post-quantum work, with Frame Transactions among the proposals being assessed.
Solana already offers Confidential Balances through its Token-2022 framework. The feature can encrypt balances and transfer amounts while keeping token accounts, account owners and participation publicly visible.
Issuers can set an optional auditor key to decrypt confidential transfer amounts. Solana says the key does not expose a full account balance and cannot authorise transfers.
Institutions test controlled disclosure
Canton Network uses a different approach, allowing controlled information-sharing between participants.
Digital Asset told the SEC in a 17 August comment letter that Canton had more than 1,000 participants and supported more than $8tn of tokenised securities activity each month. It cited Broadridge, Goldman Sachs, HSBC and Societe Generale among institutions using the network.
The $8tn figure refers to monthly financial activity reported by Digital Asset, not $8tn of assets permanently held on a public blockchain.
DTCC reported successful production transactions on 15 July involving tokenised DTC-held securities across Canton and its private Besu network. More than 30 firms took part in workflows involving US Treasury repo transactions, securities lending, collateral pledges, equities and delivery-versus-payment trades.
DTCC plans to launch its Tokenization Service in October 2026. Canton has also attracted banks developing tokenised deposits and institutional settlement systems, including projects involving JPMorgan and other major financial institutions.
Regulation remains a constraint
21Shares cited crime data to reject the idea that privacy assets account for most illicit cryptocurrency activity. Chainalysis estimated that illicit addresses received at least $154bn in cryptocurrency during 2025, while attributed illicit transactions remained below 1% of total crypto transaction volume.
Stablecoins made up 84% of identified illicit crypto volume in Chainalysis’ 2026 report. The company linked that partly to their extensive legitimate use, liquidity, low volatility and ability to support cross-border transfers. The figures do not establish that any particular privacy coin is free from criminal use.
Regulation differs between jurisdictions. The European Union’s Anti-Money Laundering Regulation bans crypto-asset service providers from maintaining anonymous crypto accounts or accounts that enable greater transaction obfuscation through anonymity-enhancing coins.
The provision will apply from 10 July 2027, when the EU’s new anti-money laundering regulation takes effect for covered financial and crypto service providers.
