Two critical developments are shaping institutional tokenization. One is this year’s leap forward in the adoption of digital money, both stablecoins and tokenized deposits. The other is persuading regulators to get comfortable with institutional usage of permissionless blockchains. Both of these topics featured in the latest news from the Linux Foundation Decentralized Trust (LFDT, formerly Hyperledger).

The LFDT announced the addition of its tenth central bank member, the Bank of Korea, which is running tokenized deposit pilots and also attempting to steer the Korean discussion around stablecoins. On the permissionless blockchain front, many institutions require privacy for transactions, whereas the default blockchain status is transparency. Earlier this year the LFDT announced the Paladin privacy framework as a new Lab, with the code contributed by Kaleido. In just nine months Paladin has graduated to a full project, with multiple central and commercial banks adopting it.

Ethereum compatible blockchains are popular amongst institutions, which was a key reason for the creation of the Hyperledger Besu project. In the past, Quorum used Tessera for private transactions, but that was deprecated. Paladin provides more than a solution for private transactions. It is a pluggable privacy framework incorporating several privacy features including private transaction workflows and privacy groups, privacy tokens and private transaction validation with a notary system. Beyond Paladin, LFDT has multiple other privacy Labs. The Ethereum Foundation is working with the LFDT to standardize generic zk-SNARKs. Nightstream is a Lab developing a post-quantum zero-knowledge proof system. And Zkbk (ZK Berkeley) is a library for building first-person credentials, based on zero-knowledge proof systems.

These projects reflect the evolution of the Linux Foundation Decentralized Trust, to encompass a broader range of projects that support decentralization, beyond Hyperledger blockchain-linked projects. So it incorporates privacy, identity and more. “These are all pieces of the puzzle that will make deployment of blockchain more effective and more enterprise ready as well,” said Daniela Barbosa the Executive Director of the LF Decentralized Trust. “That was the mission when we expanded last year. It’s really to just become that umbrella of different tech, different projects.”