Standard Kepler

ZEC-to-Fiat Listing Signals U.S. Regulatory Approval of Privacy Tokens

ZEC-to-Fiat Listing Signals U.S. Regulatory Approval of Privacy Tokens
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05/14 – 05/20

WEEKLY RECAP

  • Total market cap. reached $379.29 bn (a 2.4% decrease), where 7 day trading volume slumped 22% for top 100 crypto
  • Followed by Zcash’s Gemini listing, trading volume for privacy tokens surge against the bearish market


WEEK AHEAD

  • 23 May: QTUM to launch X86 Virtual Machine
  • 25 May: The last trade date for CME Bitcoin Futures for BTC


THOUGHTS OF THE WEEK

Privacy tokens are again in the spotlight this week as Zcash (ZEC) became the first cryptocurrency, apart from BTC and ETH, to be paired in crypto-to-fiat trading on digital asset exchange Gemini. According to Gemini’s announcement on 14 May, ZEC-to-fiat trading will be available starting 22 May.

We believe that the listing of ZEC on Gemini could mark a beginning of U.S. regulatory recognition of privacy tokens, as the New York State Department of Financial Services’ (NYDFS) authorization of ZEC-to-fiat trading indicates a satisfaction with Gemini’s ability to meet AML, KYC, and consumer protection procedures related to the trading of ZEC-to-fiat, as set forth by the BSA, the New York Banking Law, and the NYDFS itself.

This announcement is also indicative of regulators’ approval of the privacy technology behind ZEC (zk-SNARKS), which provides confidentiality for p2p transactions similar to that provided in fiat currency transfers via services such as Fedwire and SWIFT. Using zk-SNARKS technology, investors can choose to deposit ZEC into shielded or unshielded addresses at Gemini, with withdrawal only being available for the latter during the initial stage of operation.

Following Gemini’s listing announcement, the trading volume (24h) of ZEC skyrocketed 10.3x, and its price reached a monthly high of $386.4 on 15 May. As noted in our chart of the week, the price of ZEC surged to $312 on 14 May, and the upward pricing momentum persisted for the rest of the week.

We observe that despite the 22% slump in 7 day trading volume for top 100, privacy tokens were more actively traded with trading volume (7D) of ZEC surging 3.76x, while DASH and XMR volumes rose 46.3% and 19.7% respectively. It is believed that the trading volumes for privacy tokens are likely to surge further in the short term following the delisting announcement of ZEC, XMR, DASH, and REP on Coincheck, effective 18 June, forcing affected investors to move their funds.

 

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