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- A majority of countries including first-world countries such as the U.S. are working on CBDCs.
- Monero, ZCash, and Dash offer financial privacy in this digital age and are already attracting mass adoption.
It’s no secret for anyone who has been paying attention to the development of CBDCs, that it has great shortcomings. In the new digital age, CBDCs including the one being developed in the U.S. offers little to no privacy for users. In addition, these new financial products put users at risk of censorship from the government which will control its issuance and use.
Governments are not keen to address the CBDCs issues but have been quick to promote its advantages such as safety and greater financial inclusion, low account maintenance fees, faster transactions, etc. As demonstrated by cryptocurrencies and privacy-centric coins in particular, these advantages should not require users to sacrifice their privacy and financial freedoms.
Monero, ZCash, and Dash are the leading projects that demonstrate the full benefits of cryptocurrencies in the new digital age that requires digital financial systems. The three projects are regarded as privacy coins because of their special features and tools that ensure all transaction details on their network are anonymous. This offer users complete financial freedom.
In recent weeks and months, the three projects have received increasing adoption. Monero (XMR) which is the largest of the three is at the time of press ranked 24th with a market cap of $2.4 billion. ZCash (ZEC) and Dash have a market cap of $400 million and 330 million respectively.
Are privacy coins under threat?
Since their emergence, they have been the subject of regulatory concern with the U.S. and European countries discouraging their use. Others like Australia, Japan, and South Korea have outright banned them or banned exchanges from listing them. These countries cite the use of coins for illegal activities such as terrorism, drugs, and money laundering.
While this is true and some of the transactions facilitate illegal activities, data continuously shows that illegal activities make up a small amount of the total. In 2022, illicit crypto volumes reached a new all-time high of $20.6 billion but this only represented 0.24 percent of all crypto transactions.
Analysts are increasingly warning that governments could use digital tools to control their citizens. With CBDCs, governments can control, when and where their digital coins can be spent. Furthermore, they can be used as surveillance tools to track users.
Those seeking privacy-centric networks want to keep their financial life private. In the new digital age when information is carelessly handled, users are keen to ensure the financial aspect is well protected.
