The Shift to Selective Disclosure: Redefining Blockchain Privacy with Fahmi Syed

For years the hallmark of blockchain tech has been transparency and as traditional finance races to bring trillions of dollars of real world assets on chain that defined feature has become a roadblock and the industry is witnessing a fundamental shift to selective disclosure.

The Midnight Foundation is focused on driving the adoption as well as impact of the midnight Network, a privacy blockchain developed by Shielded Technologies.

Well joining us today Fahmi Syed, the President of the Midnight Foundation to discuss why programmable.

Privacy is vital for the future of global finances, .

Thank you so much for joining us.

So there have been a lot of discussions surrounding privacy.

So if institutional capital as well as artificial intelligence both requires shielded data to scale, which you see the founding crypto hos of a transparent ledger is officially dead or is a new paradigm the reality right now?

Well, first of all, morning, Rey.

Uh thank you for having me on the show.

Look, uh, when bit blockchain first appeared through Bitcoin, uh, there was a promise of a truth layer, and that truth layer came with transparency.

And as we know, in the commercial sector, financial industry, your data is part of your key position.

It's how you monetize information and create business opportunities.

So for us, we recognize that, that transparency is, is a flaw within the truth layer of blockchain.

And we at Midnight have been able to create a solution whereby businesses, individuals can protect their data and more importantly, their metadata, the who they are, the what they are, the where they are, and then using our smart contract technology, selectively disclose information to gain access, to gain leverage, to gain financing opportunities, and far beyond that. and building on what you just said, I do want to ask you about selective disclosure.

So I understand you argue that blockchains need the selective disclosure, but what does that actually mean for a bank that is trying to safely trade as well as settle assets on a network.

That's a great question.

I mean, the, the issue with the transparency has led to a shift away from the decentralized ethos of blockchain and the permissions ethos and moving to more permission private blockchains.

The issue with those blockchains is they become siloed.

There's no connectivity.

So for us, we believe within a permissions network like midnights, banks and other partners in healthcare and supply chain can present proof of information, proof of assets, proof of risk, proof of supply, and then use a smart contract to share information.

It could be a concept as simple as just proof of jurisdiction, proof of accreditation to enable them into that walled garden.

So within midnight, Applications, corporates are able to create walled gardens, private enclaves within a permissions network.

And wall garden is a term that we may be familiar with, but for the layperson out there who's watching right now, can you explain how exactly you let institutions prove they are following the rules without exposing their underlying private data?

Yeah, absolutely.

So recently, uh, during New York Digital Asset Summit, we announced a partnership with a UK regulated bank, Monument Bank.

They are servicing high net worth individuals.

And they, with approval from the Bank of England, the PRA, the regulator in the UK, have agreed to tokenize their clients' cash deposits on our network.

That's the first phase.

But in order to do so, the bank had to be comfortable that they could present those privately where only accredited clients could hold that asset but also see that asset.

And by doing so, it prevents other people looking in, identifying the ownership, identifying the asset itself.

So that's the, the concept of creating a private environment within this permissions network.

And finally, Fahmy, before I let you go, I do want to ask you about the role of artificial intelligence in this space, especially AI as automated agents start managing accounts and also making trades.

So why does this make on-chain privacy even more critical?

Great question again.

So when we think about identity, we think about passporting.

So at midnight we're working on the concept of a midnight passport that will enable anybody to not only own their assets but identify themselves in owning their assets and the recovery keys.

Now the same concept that applies to individuals can also apply to agentic agents, agentic AI, where if you think about the power that we're enabling these agentic AI agents to have.

How do you KYA?

How do you know your agent?

How do you know that they are enabled to access certain gateways to certain platforms to acquire goods for you, services for you?

So it's about sort of, Um, shelving those agents in a way that they don't see sensitive information but have enough access to go and behave and act on your behalf.

So that's where we see the evolution of blockchain again, servicing the evolution of AI.

OK, Fahmy.

Well, thank you so much for joining us today.

We appreciate your time as well as all of your insights.

Pleasure, thank you.