- Ethereum has adopted ERC 5564, a transaction layer privacy feature, which will bring further privacy for crypto users.
- The technology relies on Stealth Addresses, where a temporary receiving address is used to obscure the real address of the crypto receiver.
- Dubai has banned privacy tokens like ZCash and Monero, citing possible AML violations.
- However, it might make an exception for Ethereum due to the latter’s central role in DeFi and blockchain technology.
Can Dubai Ban Ethereum after it Adopts New Privacy Features?
Unlike Monero and ZCash, which were banned in Dubai due to their privacy-centric approach, it may find it highly difficult or almost impossible to ban Ethereum, as the latter brings similar features to its blockchain.
A new ERC 5564 has been adopted in Ethereum to deepen the amount of privacy for its users. The need for a better privacy feature arose with the rise of blockchain investigation firms, which can now easily track almost all known entities, whether public or private.
ETH Brings Deeper Privacy with Stealth Addresses
The ERC-5564 standard in Ethereum has been adopted to create blockchain addresses that provide much deeper privacy for end users. The standard introduces stealth addresses, which are temporary addresses for receiving cryptocurrencies. Once the user receives the crypto in his main address via the stealth address, this temporary address is deleted. As a result, the end receiver cannot be traced via blockchain explorers or other analytics tools.
Native Ethereum addresses can be easily tracked even if you change the wallet where you store crypto. Each transaction creates a trail that can be tracked to obtain your new address.
As a result, once identified, you can barely escape being identified. Here are Justin Sun’s crypto holdings, the founder of Tron.
Will Dubai Make an Exception for ETH?
Related: Dubai Bans Privacy Coins Amid New Digital Asset Rules
Dubai is likely to make an exception for Ethereum because the Ethereum Ecosystem plays a central role in DeFi.
The top reason is that it is almost impossible to build a crypto ecosystem without Ethereum. Almost every other major dApp is based on Ethereum. Also, most of the DeFi ecosystem is built on Ethereum.
Further, Ethereum is not a privacy-centric network like ZCash and Monero. Also, the ban seems superficial, as residents in the emirate claim they were able to use ZCash, and the real enforcement of the ban focused on institutions, not individual users of crypto.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
