One of the biggest risks that privacy coins face is that of getting banned. That’s because, governments fear they could be conduits for money laundering and other crimes such as terrorism financing. So far, governments are trying to either find backdoors into privacy coins, or outrightly ban them. In the U.S, for instance, the government advertised for independent contractors who could help with finding a backdoor to Monero (XMR) and Zcash (ZEC). That was way back in 2018. Across the Atlantic, in France, the chairman of a parliamentary committee that made a report on virtual currencies stated that privacy coins should be banned. Such moves by governments could give investors cold feet when it comes to investing in Zcash (ZEC) and other privacy coins.
However, there really is no reason to be fearful of these cryptos. For instance, a coin like Zcash behaves more like cash. This means that, if governments can manage to handle money laundering and terrorism financing issues when handling fiat money, they shouldn’t find it hard to do the same with Zcash. As per a write-up by the Electric coin company, it is easy for any government to put in place measures that can help deal with money laundering when handling ZCash. Here is an excerpt of the arguments by the Electric coin company with regards to Zcash.
The Zcash protocol requires the use of payment addresses for all transactions. This allows virtual-asset service providers (VASPs), such as exchanges, to issue a unique deposit address to each customer, thus allowing Zcash transactions to be unequivocally attributed to a specific customer. It also requires that customers provide a payment address in order to receive payments or withdrawals from a VASP. This enables record-keeping and transaction monitoring, both of which are necessary to enable the detection and reporting of suspicious transactions. It also allows VASPs to prevent customers from sending funds to payment addresses that have been identified as being associated with sanctioned persons or organizations.
Clearly, there would be no point in any government making a move to ban Zcash. In fact, as knowledge of cryptocurrencies grows, most governments will embrace privacy coins like Zcash. That’s because privacy is a basic human right and citizens in most countries are demanding it. This explains the rise of tough privacy laws such as the GDPR in the EU. In essence, privacy coins are a win-win. They give people the right to financial privacy as a basic right while giving governments the ability to deal with financial crimes such as money-laundering.
On this basis, Zcash (ZEC) comes across as a cryptocurrency that has room to grow, and highly undervalued at current prices. Once the upcoming upgrade deals with the issue of inflation, Zcash could gain the momentum to push way higher than its 2017 highs. It is now better-known than it was in 2017, and its future is becoming clearer in the face of potential regulations. This is the future of money. In the future, as more people begin to appreciate the value of privacy in finance, ZCash transactions will grow.