According to a 2020 study from the Copenhagen Business School, private cryptocurrencies are being developed using cryptographic protocols that make regulatory oversight not possible. The study is published in the Journal of Information Technology.

“If decentralized privacy-preserving cryptocurrencies become popular in the future, to the point they can be routinely exchanged without users having to convert to other currencies and systems, there is no obvious way for regulators to impose post-hoc regulation,” says Associate Professor Rob Gleasure from the Department of Digitalization, Copenhagen Business School.

“What the regulators do not realize is those who control the code will control the rules and so far, they have not accepted this and are in denial,” he adds.

The research pointed out that it would be extremely difficult to enforce a ban on privacy cryptocurrencies across all jurisdictions – given the decentralization of these projects. The study recommended that regulatory bodies prepare for the future possibility where identity linkable transactions may not exist.

“If these cryptocurrency communities have their own financial system which exists separately, and they become impossible to regulate, then it’s important to understand and understand this early. Once regulators accept it, they can then begin developing new methods to compensate,” concludes Associate Professor Rob Gleasure.

For an up-to-date market overview of Privacy Coins click here: General Market Overview of the Privacy Coin Market

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Disclaimer: All contexts of blog posts are based solely upon the analysis and opinion of the author and are not intended to construe any financial advice in any form.