Private Finance (PriFi)

Private finance, shortened to PriFi, is an informal term used in parts of the crypto industry for decentralised financial applications that hide sensitive details, such as account balances, trade sizes or counterparties, from the public. Ordinary DeFi on public blockchains is fully transparent: anyone can trace a wallet's holdings and activity. PriFi projects aim to offer lending, trading or payments with confidentiality, typically using zero-knowledge proofs, fully homomorphic encryption or other privacy-enhancing techniques, sometimes with features that let users disclose data selectively to auditors or regulators. The label has no fixed definition and is used mostly in marketing. It should not be confused with "private finance" in traditional markets, which usually means non-public funding such as private credit or private equity. Privacy tools in finance raise anti-money laundering questions that regulators continue to examine.