UAE ban privacy coins
The United Arab Emirates (UAE) ban privacy coins. This joins the Arab state in a number of countries that only put certain cryptocurrencies under a ban, while other coins remain untouched.
UAE ban privacy coins
The United Arab Emirates has imposed a comprehensive ban on privacy coins. CoinDesk reports on this and refers to a new law that was presented in Dubai on Tuesday. There it says:
The issuance of and all activities related to anonymous cryptocurrencies are prohibited.
The best-known representative of privacy coins is Monero (XMR). Cryptos such as Zcash (ZEC) or Dash are also affected by similar bans in other countries. Unlike most cryptocurrencies, privacy coins do not use a transparent blockchain .
Accurate information about transactions and the finances of individual blockchain addresses are therefore not visible to every observer. The implementation of this encryption varies between the individual representatives of the category. While Monero relies on complete encryption, Zcash has the option to choose between a confidential and a transparent money transfer.
UAE legislation defines privacy coins as “a type of virtual asset that prevents tracing of transactions or record of ownership by distributed ledgers.”
In addition , in order to fall under the category of privacy coins in the Emirates, there must be no option to decrypt the encryption for outsiders.
Encryption of the blockchain increasingly trending topic
Blockchain encryption is increasingly becoming a hot topic. It was not until 2022 that the previously transparent cryptocurrency Litecoin introduced the Mimblewimble protocol to enable confidential transactions.
Ethereum’s inventor Vitalik Buterin also recently called for stealth addresses for ETH , as are already known from privacy coins. Last year, the US in particular clashed over crypto protocols that allowed transactions to be obfuscated.
The Bitcoin mixer Blender.io and the Ethereum mixer Tornado.cash were officially banned in the USA – a development that increasingly threatened Ethereum with possible state censorship .
Some countries, such as South Korea and Japan, have been banning privacy coins for a long time. However, a practical restriction is not entirely possible. Only the use in trading on centralized crypto exchanges suffers from this decision.
In November, it emerged that the European Union is also currently debating a privacy coin ban. Czech MPs demanded this step. Because states are unable to trace the payments processed in the affected networks, they often find their supremacy threatened by confidential cryptocurrencies.