Fully Homomorphic Encryption (FHE) in blockchain offers a powerful solution to balance privacy and regulatory compliance. FHE enables computations on encrypted data without decryption, ensuring sensitive information remains private while allowing authorized parties to process it. In blockchain, FHE can protect user data in smart contracts or transactions, maintaining confidentiality even on public ledgers. Meanwhile, regulatory compliance is achieved by enabling auditors or regulators to verify encrypted data through zero-knowledge proofs or selective decryption under strict access controls. This ensures adherence to laws like GDPR or AML without compromising user privacy. By integrating FHE, blockchain systems can provide robust privacy guarantees while meeting regulatory requirements, fostering trust and scalability in decentralized applications.