Both Monero (XMR) and ZCash (ZEC) have surged approximately 8% in the past 24 hours despite stagnation in the Bitcoin price. This latest rally makes the two privacy-focused cryptocurrencies some of the best-performing digital assets of the past day.
It appears that this rally is related to news that the U.S. government is targeting encryption. In a world where companies are meant to “embed the safety of the public in system designs,” which may harm privacy, decentralized cryptocurrencies that are provably anonymous gain value.
Monero and ZCash do have privacy capabilities. However, it’s worth noting that there are governmental agencies looking to deobfuscate the technologies, which may drive the tokens lower.
Why Monero and ZCash Are Likely Rallying Today
According to TradingView data, both Monero and ZCash have gained approximately 8% in the past 24 hours.
Chart of Monero’s price action and ZCash’s price action over the past few days from TradingView.com
Analysts say that this ongoing move higher comes in response to a statement from the U.S. Department of Justice (DOJ) indicating that companies should install encryption backdoors.
In a statement released on October 11th, the DOJ said:
“We call on technology companies to work with governments to take the following steps, focused on reasonable, technically feasible solutions: Embed the safety of the public in system designs… Enable law enforcement access to content in a readable and usable format where an authorisation is lawfully issued… Engage in consultation with governments and other stakeholders to facilitate legal access.”
Where Monero and ZCash fit in is that they are technologies that are already deployed, meaning that a backdoor cannot be installed, at least not without people noticing.
International Statement: End-To-End Encryption and Public Safety https://t.co/q7gvZfeHms
— Justice Department (@TheJusticeDept) October 11, 2020
Many in the cryptocurrency space have reacted negatively to the news.
For one, Matt Odell, a prominent Bitcoin podcaster and privacy advocate, recently stated:
“Encryption bans will not prevent criminals or our enemies from using it. They will go out of their way to use encryption if necessary. An encryption ban will simply hurt law abiding honest citizens and make us incredibly vulnerable to malicious actors.”
IRS Looking to Crack Privacy Coins & Privacy Tech
While decentralized technologies do not need to implement backdoors as the government wants, Monero and ZCash are coming under fire from the government.
It was revealed a few weeks ago that the IRS is giving a $625,000 grant to developers/contractors that can successfully crack technology like Monero or the Lightning Network.
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