Is France Considering a Ban on Privacy-Centric Cryptocurrencies?

Members of the French National assembly are discussing the prohibition of some privacy currencies, mentioning by name Monero, Zcash, PIVX, and DeepOnion, within a larger, general report about cryptoassets to the country’s lower house of parliament.

At almost 150 pages, the document - non-descriptively named as a report on “Virtual Monies” - is a bruiser, and includes copious general explanations of what blockchain is, the origin story of Bitcoin, and even the subject of the “mysterious Satoshi Nakamoto.” Its authors are Éric Woerth and Pierre Person.

As with seemingly every government document that treats of crypto, this one discusses the ramifications of cryptocurrency used for the purposes of money-laundering, terrorist financing, and other illicit activities - including in the context of new EU-wide financial legislation - the so-called “5MLD” which for the first directly legislates cryptoassets in the monetary union (and which CryptoGlobe have covered several times).

Is the French Parliament Banning Privacy Coins?

The 5MLD is already cracking down on unregistered crypto exchanges operating within the EU, meaning users will be forced to hand over identity details to centralized exchanges - who will be forced to ask for them.

The issue of privacy currencies, however, is another question altogether. One of the key mentions regarding privacy coins came during the paper’s introduction, as the authors were discussing existing regulation on cryptoassets. To wit:

It may have been appropriate to propose the prohibition on dissemination and trade of cryptoassets that aim to, by virtue of their design, guarantee complete anonymity by preventing identification. (Author’s translation.)

“Two schools of thought” are outlined in the paper, as regards the regulation of crypto in France - which schools are broadly repeated themes when it comes to government regulation. One is the separation of blockchain and cryptocurrency - “Blockchain, not Bitcoin”; and the other, adhered to “mostly by pioneers in the sector,” sees these two as inseparable.

Speaking of the former, the authors describe the first school: “[it] is to encourage the rise of blockchain technology undeniable opportunities, while advocating the isolation or prohibition of [those] cryptoassets deemed too risky.”

For now, no concrete decisions seem to be in the offing. And although privacy coins can be easily banned from regulated, centralized exchanges, little thought seems to have been given on how to ban privacy coins in general, or from decentralized exchanges.