Why Selective Disclosure Matters for Blockchain Adoption in Japan

Japanese institutions are cautiously integrating blockchain technology, focusing on practical applications like stablecoin settlement rather than speculative volatility. A major hurdle is the inherent transparency of public blockchains, which conflicts with Japan's stringent data privacy expectations, particularly those outlined in the Act on the Protection of Personal Information (APPI). APPI demands strict accountability for personal data handling, including limitations on access, correction rights, and cross-border transfers, which are difficult to reconcile with immutable, shared ledger technology. Builders often get stuck between fully transparent systems and overly restrictive private ones. The solution lies in adopting selective disclosure and zero-knowledge techniques, allowing institutions to prove compliance or conditions were met without exposing underlying sensitive data. This privacy-by-design approach aligns with regulatory expectations, clears pathways through risk assessment, and is essential for blockchain to move beyond pilots into sustained, regulated institutional use in Japan and beyond.

(Source：BeInCrypto)