CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

EU dodgy money rules make European privacy coin use ‘pointless’

By Paul Golden and Aaron Woolner

03:11, 24 May 2022

EU flying in full mast at the European Parliament building
EU dodgy money rules make European privacy coin use ‘pointless’ – Photo: Shutterstock

The European Parliament’s decision to back a bank-friendly framework for dealing with anonymous digital wallets in the trading bloc makes the use of privacy coins, such as monero (XMR) and Zcash (ZEK) ‘pointless’. 

At the end of March, the European lawmakers voted in favour of a proposal that all transfers of crypto assets must include information on the source of the asset and its beneficiary.

Ryan Shea, crypto economist at trading platform Trakx the European Union’s (EU) approach to the so-called ‘unhosted wallet’ issue creates serious problems for users of privacy coins.

Monero to US dollar (XMR/USD)

Shea says that if these rules are implemented it will make the use of privacy coins within the EU pointless because users will have to abide by travel rules that require virtual asset service providers to share information on the sender and receiver. 

Shea’s view was backed by Monero community member Ian Niculescu who says that the proposed regulation could encourage exchanges to stop dealing with privacy coins. 

Niculescu however, points to an alternate outcome whereby regulators encourage exchanges to list Monero or Zcash if they cannot stop ‘underground’ adoption since they will want them to collect as much customer KYC (know your customer) data as possible.

What is your sentiment on XMR/USD?

154.60
Bullish
or
Bearish
Vote to see Traders sentiment!

Zcash to US dollar (ZEC/USD)

 

ETH/USD

1,870.99 Price
-1.830% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 5.00

BTC/USD

27,107.75 Price
-2.470% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 60.00

SHIB/USD

0.00 Price
-2.190% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.00000055

OMG/USD

0.75 Price
-5.410% 1D Chg, %
Long position overnight fee -0.0255%
Short position overnight fee 0.0032%
Overnight fee time 21:00 (UTC)
Spread 0.0065

The EU’s unhosted wallet proposals have been fought bitterly by the trading bloc’s crypto sector. Czech member of the European Parliament (MEP), Ondřej Kovařík previously told Capital.com that that can “be extremely difficult if not impossible to implement.”  

An industry lobby group went further saying that the unhosted wallet rulebook meant that Brussel’s risked the EU becoming a crypto pariah. 

Not everyone is against the EU’s proposals on unhosted wallets. The greater scrutiny they involve will enable the region’s lenders to now take a lead role in the digital asset market.

“Without [the unhosted wallet rule], there is no way that our compliance team would allow crypto activities,” one Europe-based banker told Capital.com.  

An in-depth feature comparing looking at privacy coins will go online tomorrow.

Markets in this article

XMR/USD
Monero / USD
154.60 USD
-2.21 -1.440%
XMR/USD
Monero / USD
154.60 USD
-2.21 -1.440%
ZEC/USD
Zcash / USD
33.14 USD
-1.14 -3.340%
ZEC/USD
Zcash / USD
33.14 USD
-1.14 -3.340%

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 530.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading