Fully Homomorphic Encryption (FHE) revolutionizes blockchain by enabling computations on encrypted data, ensuring privacy without compromising regulatory compliance. FHE allows blockchain transactions to remain confidential while permitting authorized parties, like regulators, to access encrypted data for audits using secure keys. This balances user privacy with oversight needs. For instance, financial transactions can be processed privately, but regulators can verify compliance without exposing sensitive details. FHE’s computational efficiency is improving, making it viable for blockchain applications like DeFi and smart contracts. However, challenges like high computational costs and key management persist. By integrating FHE, blockchain can achieve robust privacy, foster trust, and meet global regulatory standards, paving the way for secure, compliant decentralized systems.