The Finance Committee of France’s National Assembly recently put together a report (PDF) on crypto assets and blockchain technology. The committee’s report includes a forward from the committee’s president, Éric Woerth. In this introductory portion of the report, Woerth claims it would be appropriate to propose a ban on activity related to cryptocurrencies built with the goal of providing greater levels of anonymity to users.
Woerth’s Comment on Anonymous Cryptocurrencies
Before getting into the issues associated with privacy-focused cryptocurrencies, Woerth briefly mentioned some of the challenges created by the existence of cryptocurrencies for regulators and lawmakers.
“We must be aware of the problems that [cryptocurrencies] can pose in terms of fraud, tax evasion, money laundering or fraud, or energy consumption,” reads Woerth’s opening remarks.
“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,” Woerth later adds. “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.”
The extent to which Woerth would like to see these anonymity altcoins banned is unclear in the text. These remarks could be referring to a complete ban on the use of these bitcoin alternatives or something less severe like disallowing exchanges from listing them for trade.
On a related note, the Winklevoss Twins recently stated their view that regulators are more comfortable with Zcash than Monero when it comes to cryptocurrencies focused on privacy and anonymity.
Woerth’s rhetoric regarding anonymous cryptocurrencies did not extend to the greater blockchain and crypto asset ecosystem. In this way, Woerth is making the point that only the parts of this new technology that are explicitly problematic for law enforcement agencies should be targeted with bans.
“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,” writes Woerth.
The report itself recommends an international regulatory framework at the points where crypto assets and the traditional financial system meet, adding that physical cash is still king in terms of criminal finances.