Keep Innovation in America Act
On November 18, 2021, a bipartisan group of US lawmakers introduced the Keep Innovation in America Act to address crypto taxation issues found in the newly signed Infrastructure Bill. This legislation seeks to ensure that regulations around cryptocurrency do not hinder innovation, entrepreneurial growth, or fundamental privacy rights. The act proposes to redefine key terms such as "broker" and "digital asset," limiting the amount of information brokers can collect from cryptocurrency users.
Representative Tim Ryan highlighted the importance of balancing regulatory oversight with innovation, stating, “We need to figure out how to protect consumers while also giving crypto technologies room to grow and transform finance.” The bill has gained the support of several major organizations in the crypto space, including Coin Center, the Blockchain Association, the Crypto Council for Innovation, and the Electronic Frontier Foundation.
Though it may take time for this proposal to become law, it signals a meaningful shift in the US government’s stance on digital assets. By acknowledging the permanence of cryptocurrency and the importance of privacy, lawmakers are beginning to integrate blockchain technologies into the regulatory framework without stifling growth.
Kraken Removes Monero in the UK
Across the Atlantic, crypto exchange Kraken has delisted Monero from its platform in the United Kingdom, citing compliance with local regulatory requirements. Kraken joins other exchanges like Bittrex, which removed Monero in 2020, and Coinbase, which has opted not to list privacy-focused coins altogether.
Privacy coins like Monero have often been criticized for their potential misuse in illegal activities such as cybercrime, drug trade, tax evasion, and untraceable financial dealings. However, these accusations don't apply to the majority of users. At the Consensus 2021 conference, Grayscale VP Craig Salm argued that using privacy-enhancing features does not imply illegal intent. In fact, a CoinDesk report notes that criminal activity comprises a much smaller percentage of crypto transactions than those in traditional fiat currencies like the US dollar.
Privacy coins offer a level of confidentiality valued by legitimate users, including businesses and individuals who prefer not to expose transaction details or wallet information publicly on the blockchain. These coins serve a real purpose for financial discretion, not just secrecy.
The Outlook for Privacy Coins
Although regulatory actions are increasing, privacy coins like Monero continue to thrive. While some centralized exchanges have removed these coins, many still support them. Additionally, decentralized exchanges and peer-to-peer platforms offer alternative methods for trading. At the same 2021 Consensus event, Solidus Labs COO Chen Arad emphasized that regulators and crypto platforms can work together. Rather than demanding personal data, authorities can use tools like AI-driven analytics and machine learning to monitor risks without compromising user privacy.
Despite the scrutiny, the privacy coin market remains strong. The total market cap of these coins has surpassed $15 billion. Monero, in particular, saw a 109% value increase in 2020 and recorded a daily transaction peak on November 10, 2021. Price predictions from Wallet Investor suggest Monero could reach $332 by the end of 2021 and rise to $483 by the end of 2022. Digital Coin offers similarly optimistic projections.
As with any financial decision, conducting your own research is essential before investing in cryptocurrency. Never invest more than you can afford to lose. Prioritize online security and store the majority of your crypto assets in a wallet. For Monero users, XMRWallet is a secure, free, web-based solution that gives you complete control of your XMR and private keys. Always safeguard your credentials, including passwords, seed phrases, and keys, to protect your digital wealth.
