Non-profit human rights foundation: Stablecoins lack of privacy
According to the non-profit Human Rights Foundation (HRF) on Nov. 20, privacy tooling for stablecoins appears to be incredibly lackluster.
HRF analyzes privacy, censorship, and stablecoins
Private coins are coins focused on protecting user privacy when sending, receiving, and paying transactions. Privacy is an essential feature for people living in authoritarian jurisdictions and where the government controls what individuals do.
According to the HRF report, for non-stablecoins, the most significant weekly losses from the beginning of the year have ranged from 24% to 34%. This shows the attractiveness of stable-value crypto assets, especially for citizens in hyperinflationary economies.
“The privacy coins can help citizens escape the control of the capital from the state. At the same time, avoid the centralized supervision of digital payment processors, bank intermediaries, and other non-banks.”
However, according to the report, to prevent the adverse effects of hacking, several stable coin issuers introduced a blacklist for users to freeze stable coins held at specific addresses. And this is how stablecoin issuers themselves compromise their citizens’s potential financial autonomy. Tether (USDT), USD Coin (USDC), TrueUSD (TUSD), Pax Standard (PAX), and Binance USD (BUSD) issuers all have this function.
Lack of privacy solutions for stablecoins
According to blockchain analysis firm Chainalysis, a large number of ledgers are being monitored. And it should be emphasized that Chainalysis is the place to license its tools to law enforcement units of many governments. With Chainalysis’s tools, governments can have information about users and traders.
Currently, coins insured by Chainalysis account for 90% of the total cryptocurrency trading volume on the market. However, several tools on the market will allow users to be protected against these types of analyses.
The security tools will need to address the fact that the blockchains also store past activity. This is what security service providers need to take into account.
Although end users can switch to private money, they do not provide stability to their portfolio. This is why it is essential to have the necessary tools for stablecoins to be protected against government oversight.
Given the immutability of the blockchain, security tools are essential. However, most stablecoins are incredibly unconcerned.
USDT on Liquid is positively rated in this light, while Dai (SAI) on Ethereum is reported to be vulnerable – although the report includes a shortlist of technologies – including phase services. Mixing and security system with no knowledge for Ethereum – can help alleviate many of these shortcomings.
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