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Earlier this week, Dubai lawmakers passed a set of new laws pertaining to cryptocurrencies, which will effectively prohibit the use of privacy coins. According to them, privacy coins are all those cryptocurrencies that prevent transaction tracing and identification of ownership. Among those are Monero (XMR), Zcash (ZEC), and all the other cryptocurrencies meant to enhance the privacy of the users.
The new set of cryptocurrency policies is meant to regulate the industry, which is seeing constant growth in the United Arab Emirates. As the country is looking to turn its largest city, Dubai, into a crypto hub, the new regulations are supposed to make it easy for companies to do business fair and square. Not everyone, however, agrees that banishing privacy coins from Dubai is the right move.
Christopher Goes, who’s one of the co-founders of blockchain technology company Anoma is one of those who reacted negatively to the news coming from Dubai. According to him, the new anti-privacy coin laws show the UAE’s lack of knowledge about basic human rights.
His views are shared by many other crypto enthusiasts on social media, who believe user privacy must be respected at any cost.
There is, however, a significant number of crypto heads who believe that Dubai lawmakers have done the right thing in banishing privacy coins. The CEO of WadzPay MENA Khaled Moharem, for example, says that he wasn’t caught off guard by the new laws.
According to him, the new laws were expected by practically everyone involved with the crypto industry. Moharem also suspects that the UAE is only the first on a long list of jurisdictions that are going to say farewell to privacy coins in near future.
Dubai regulators aren’t alone in their battle against privacy coins, with similar steps set to be taken in other jurisdictions, including Japan and the European Union.
In Japan, lawmakers are reportedly working together with crypt exchanges, who have already four major privacy coins from their offer – Monero, Zcash, Dash, and Augur’s Reputation.
Over in Europe, EU officials are rumored to be working on an anti-money laundering bill, which would tackle the issue of privacy coins. The bill is supposed to go to a vote sometime this summer, and if it’s passed, it will practically mean the end of anonymous payments in the European Union.
Privacy coins use various protocols to ensure the anonymity of everyone involved in a transaction, while also obscuring the transaction amount, and other relevant information. As a result, these cryptocurrencies make it difficult for outside entities to keep track of the flow of funds. Note the word “difficult” here – although it’s hard to monitor transactions made with privacy coins, that’s not impossible.
There isn’t a single cryptocurrency that’s 100% anonymous in the world in 2023. Breaking the code of privacy coins, however, takes a lot of time and resources, which is why a much simpler solution for governments is simply to ban them as the UAE’s done recently.
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