French Finance Head: Privacy Cryptos Should Be Banned

French Finance Head: Privacy Cryptos Should Be Banned

In an extensive report on the crypto space, the Finance Committee of France’s lower house of parliament — the National Assembly — is recommending a ban on privacy-focused cryptocurrencies. The reasoning of this report is these currencies provide greater anonymity to users, making it easier for criminals to evade law enforcement. 

Also read: Russian Private Crypto Users May Face 15 Years in Prison for Avoiding Registration

Subscribe to the  YouTube channel for great videos featuring industry insiders & experts

Proposed Ban Lacks Classification

The finance committee published a 148-page report noting the uses of virtual currency and the distinction from its underlying blockchain technology. However, comments from committee president Éric Woerth suggesting a ban on privacy-focused cryptocurrencies gained the most attention.

In the introductory section of the report, Woerth stated, “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.”

Interestingly, there are two types of anonymous coins. One provides complete privacy, while the other offers privacy as an option. Cryptocurrencies such as Monero and Enigma, for example, provide total anonymity. Dash and Navcoin, on the other hand, provide optional anonymity.

But, Woerth’s proposed ban has failed to make the clarification of which cryptocurrencies should face such prohibition.

Although, Woerth did name Monero, DeepOnion, Zcash and PIVX as definite candidates for this potential ban.

A key takeaway from the Woerth’s comments is that he suggests banning only privacy-focused digital currencies and not all cryptocurrencies.  

“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,” said Woerth.

Banning Anonymous Altcoins Is Unintelligent

Additionally, the committee president highlighted issues arising from the increasing use of cryptocurrencies. The report stated some of the major concerns associated with cryptocurrency include money laundering, tax evasion, and energy consumption.

As such, with the absence of domestic regulation for the crypto space, the committee report recommends the establishment of an international regulatory framework.

Even though governments repeatedly cite cryptocurrency as a tool for financial crime, it does not even account for a small portion of criminal activity in the financial sector. In fact, the French committee report noted that cash still remains the go-to option for criminals.

Meanwhile, on a practical note, Woerth’s recommended ban on privacy-focused cryptocurrencies makes no sense, as criminals would continue to use them even after the ban. As these digital currencies ensure complete anonymity, it’s hard for law enforcement agencies to track down criminals using these altcoins.

Instead, the committee should have suggested a more practical approach, such as forming a task force to look into these anonymous altcoins. Last year, the United States Department of Homeland Security (DoHS) revealed such an approach, announcing its intent to research ways to track privacy coin transactions.

Will France ban privacy-focused cryptocurrencies? Share your views in the comments section.

Images via Party of European Socialists, Angel Investor Review