Rapid expansion of smart cities has resulted in the generation of vast volumes of sensitive citizen and institutional data. Managing this information requires governance models that effectively balance privacy, accountability, scalability, and sustainability. This study proposes a blockchain-enabled, privacy-preserving governance framework that integrates pseudonymous authentication, zero-knowledge proofs, homomorphic encryption, and a PBFT consensus mechanism to establish secure and trustworthy digital governance. The proposed framework was implemented and evaluated within a controlled testbed simulating diverse urban workloads, including online voting, energy monitoring, and participatory budgeting. The experimental outcomes indicate notable improvements across multiple performance dimensions. The system consistently reduced aggregation error by 25% compared with homomorphic encryption alone, and by over 60% relative to pseudonym-based or differential privacy methods. Throughput exceeded 1100 transactions per second, with sub-second latency maintained under realistic operational conditions. Security analysis confirmed strong resilience against potential threats. The probability of successful attacks, including Sybil, inference, and collusion, was suppressed to below 5%, compared with up to 48% observed in baseline schemes. Regarding sustainability, the framework demonstrated remarkable energy efficiency, consuming only 75 J per transaction, making it more than ten times less energy-intensive than proof-of-work blockchains. Scalability testing further showed support for approximately 2500 transactions per second at block sizes of 2 MB, operating optimally with 19–25 validators to ensure both decentralization and efficiency. Overall, the results confirm that the proposed governance framework is technically robust and ready for practical adoption. By uniting advanced cryptographic tools with lightweight consensus mechanisms, it offers a viable pathway toward privacy-preserving, accountable, and energy-efficient urban governance infrastructures that can sustain the long-term evolution of smart cities.