French Finance Committee Recommends to Ban Privacy Coins

In a recently published report, the Finance Committee of France’s National Assembly has proposed for a complete ban on the privacy-focused Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

Though the report elaborated the use of crypto assets and the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term technology, its introductory part grabbed the attention as the committee's president Éric Woerth showed his tough stance against the digital currencies providing anonymity to the users.

“We must be aware of the problems that [cryptocurrencies] can pose in terms of fraud, tax evasion, money laundering or fraud, or energy consumption,” Woerth noted.

“It would also have been appropriate to propose a ban on the dissemination and trade in [cryptocurrencies built] to ensure complete anonymity by preventing any identification procedure by design...This is the case for a certain number of [cryptocurrencies] (Monero, PIVX, DeepOnion, Zcash...) whose purpose is to bypass any possibility of identifying the holders. To date, regulation has not gone that far.”

However, the report did not put a clear picture of the extent to which the committee is proposing the ban, as there is a wide range of privacy coins in the market.

The report also recommended the setting up of an international regulatory framework for the digital asset class.

The Growing User Base of Privacy Coins

Many privacy coins popped up in the market even before the crypto boom in 2017. Their aim is to provide complete anonymity to the users who were among the core principles of the blockchain technology. In case of Bitcoin or Ethereum, any particular coin can be tracked to the block at which it was mined. However, this cannot be achieved with privacy coins.

This, however, motivated the criminals to use such privacy-oriented digital currencies for extortion - Monero had become one of the popular choices of extortion in the Ransomware attacks.

In addition to the end-to-end privacy coins like Monero and ZCash, other customizable privacy coins also hit the market. These coins are based on the Mimblewimble-protocol and allow the users to set their own privacy levels.

“The distinction between the different uses of [cryptocurrencies] must continue, to establish a finer and more precise regulation protector of the general interest, as well as the private interest of the entrepreneurs of this domain,” the president added.