A country that once served as a beacon of hope for blockchain projects in recent months has sharply changed its position, redefining the role to be played by cryptocurrency in the commercial ecosystem of Japan.
Earlier this week, Japanese financial security Agency (FSA) announced that from June 18 all the cryptocurrencies that provide a sufficient degree of anonymity of its users, will be officially banned.
Most of the Japanese exchanges are already doing the delisting of four main coins, privacy — XMR, DASH, REP and ZEC.
For the cryptocurrency community it is obvious that the January burglary CoinCheck, which resulted in the theft of 523 million tokens NEM (at a cost of approximately 524 million U.S. dollars), has created a ripple effect that has serious implications for the future.
If you ask any industry expert, what are the fundamental aspects of cryptocurrencies, it is likely to give you permanence, interoperability, decentralization and privacy. All of them are critical for long-term success of the industry.
In order for the platform is truly considered “decentralized”, it should exclude the possibility of manipulation or control by Central organizations, which is impossible without privacy. And, as evidenced by recent incidents in large multinational corporations, Equifax, and Facebook our data was never really protected.
In fact, in 2018 it was 12 918 657 yasashisani records, and it is expected that the number will increase. That’s why it is necessary to cryptographically secure the projects based on the blockchain to protect the public from large multinational corporations (or hackers) seeking to take advantage of their valuable information.
Similarly, in order for the platform were considered “unchanged”, it should provide unprecedented transparency of an exchange, which cannot effectively occur if no additional level of privacy. Every time there’s a cryptocurrency transaction, user information is available to the entire community.
It may seem that the majority of cryptocurrencies from Bitcoin to Live, meet these criteria. However, in the future will require a more secure platform that protects users by using powerful cryptography.
In its assessment of the coins with the privacy FSA explicitly stated that the main reason for the ban is the potential for their anonymous use for criminal purposes .
During the investigation of a break-CoinCheck anonymity is obviously an obstacle for the authorities who want to find the culprit of the attack. Thus the coins of privacy have become the scapegoat.
To ensure that the Domino effect does not happen in countries around the world, cryptographic companies should take the initiative and explain to the regulators the potential value of that coin provides privacy for the industry of the blockchain.
The decision of the FSA is one of the first times that state Agency questioned the status of confidentiality and the ability to positively influence our commercial ecosystem. But this case certainly not be the last.
Taking precautions, companies can refute any misconceptions about the use of technology and to ensure long term sustainability of the space for years to come.