By CCN: The CEO of Binance cryptocurrency exchange, Changpeng Zhao, has predicted that India’s proposed anti-crypto bill will spur the adoption of privacy coins such as Monero and ZCash in the country.
Zhao, who runs one of the world’s largest cryptocurrency exchanges by trading volumes, hinted that such a development would be highly significant monumental noting that around 20 percent of the global population resides in India.
As earlier reported, the draft anti-crypto bill proposes a 10-year jail sentence for anyone who directly or indirectly mines, generates, holds, sells, transfers, disposes , issues or deals in cryptocurrencies in India. This effectively outlaws not just cryptocurrency exchanges and bitcoin mining operations but also individuals from possessing crypto.
In predicting that India’s anti-bitcoin bill will lead to privacy coins flourishing in the country if passed, CZ, as he is popularly known, is partially right. Yes, Indian cryptocurrency users may flock to the likes of Monero and ZCash. This is because these coins their transactions will be hidden from government oversight and thus giving users immunity from prosecution.
While private, transactions involving Bitcoin and other non-privacy focused cryptocurrencies are not anonymous. This anonymity has especially been eroded with the growth of blockchain tracking and analysis firms. These firms are used by among others by law enforcement agencies in inferring the identity of those behind cryptocurrency transactions of interest.
Where CZ goes wrong is assuming there will be no reaction from the authorities if privacy coins boom. Once the authorities realize the loopholes being exploited, chances are high that even more draconian regulations could be introduced. This would include banning privacy coins.
If the detrimental actions authorities in India have taken against crypto are anything to go by, this is not unthinkable. The Reserve Bank of India already prohibits banks from offering services to crypto-related businesses. A decision is still pending after the RBI directive was challenged in court.
Assuming it gets to the point of banning privacy coins, the Indian government wouldn’t have to look far for precedent. Japan, which is one of the most crypto-friendly and progressive countries in the world has already shown that this can be done and how it could be done.
Last year the Far East Asian country, introduced a regulation requiring domestic crypto exchanges to delist privacy coins. Specifically, Japan’s Financial Services Agency (FSA) pressured exchanges to delist the likes of Monero, Dash and ZCash.
In making the decision, the FSA cited the fact that their enhanced anonymity features make them ideal for money laundering. Among the Japanese exchanges that were the first to meet the new conditions included Coincheck. Outside of Asia, France has also been reported to be considering banning privacy coins.
Last modified: July 2, 2020 7:26 PM UTC