Midnight to Link Bank Blockchains With Privacy Layer

At Consensus Miami, Fahmi Syed, president of the Midnight Foundation, described a system that could let clients prove ownership of assets across private bank blockchains without transferring those assets.

Syed said major banks including JPMorgan Chase, Goldman Sachs and Citigroup are building private ledger systems that improve internal transparency and efficiency but create friction for clients who need to use positions across different banks. He noted a hedge fund with accounts on multiple private chains currently has no simple way to present an asset held on one bank’s ledger inside another bank’s system.

Midnight’s approach uses cryptographic, privacy-preserving proofs to confirm that an asset exists on its original ledger and that the presenter controls it. Rather than moving tokens or migrating assets, the system would allow another network to verify identity and ownership through a single proof. Syed described Midnight as a unifying layer that can handle identity, access and agency so other networks can check one private identity proof when needed.

On token design, Syed explained that Midnight separates access from ownership. The platform’s Knight token is intended to pay transaction fees and to be leasable or delegable, so users do not have to buy a native ownership token just to use the network. He said that approach avoids forcing users to bridge tokens to interact across chains.

When asked about custody and lending, Syed clarified that Midnight does not plan to act as a bank, custodian or lender. The foundation would provide rails and privacy features that others can use to build lending products where users borrow against assets they retain control of.

Revenue could come from network activity and delegated gas fees as operators and users join, Syed said, and he acknowledged uncertainty about whether those streams will be sufficient. “Time will tell. If I had a crystal ball, I would not be standing here,” he added.

Syed placed Midnight’s proposal in the context of wider industry fragmentation: global banks are experimenting with private chains and identity systems while decentralized finance platforms operate on public networks such as Solana and Ethereum. That fragmentation can require repeated KYC checks and complicate cross-network asset use. Midnight aims to let a single private identity proof live on its layer so banks, lending apps and other networks can validate ownership and permissions without exposing full user files or requiring asset transfers.