Zinger Key Points
- Central Bank Digital Currencies risk creating a surveillance state, says Elusiv's co-founder.
- Transparency versus privacy in blockchain is a key tension that needs resolution, says Yannik Schrade.
Yannik Schrade, co-founder of privacy protocol Elusiv, articulated on Friday a nuanced view on the regulatory stances in the U.S. and Europe.
Schrade emphasized the need for innovation-friendly policies, even as he delved into the intricacies of maintaining privacy in the era of digital currencies, the potential of stablecoins and the essential role of education in advancing the industry.
In an interview with Benzinga at Solana's SOL/USD Breakpoint conference, Schrade shared his perspectives on how the industry can navigate the complexities of regulation without stifling innovation.
Elusiv's latest venture, Project ZEUS — a Zero Knowledge Encrypted User Safeguarding system — proposed a decentralized approach to compliance that doesn't compromise on-chain privacy. Schrade called it, "Our big new innovation."
He added, "It enables us to have both on-chain privacy but at the same time compliance which prevents illicit actors from exploiting that privacy."
The co-founder's insights came when the crypto industry was under heightened scrutiny, with regulators and industry players seeking common ground.
Schrade was upbeat about the progress in Europe, stating, "The regulations that we've seen in Europe are really showing us that it can be possible."
He stressed the importance of proactive engagement with regulators and highlighted the work of organizations such as the European Crypto Initiative in shaping legislative efforts.
Regarding Central Bank Digital Currencies (CBDCs), Schrade expressed concern over the potential for "complete surveillance of all your financial activity," advocating for privacy tools that afford users the anonymity absent in traditional financial systems.
Schrade saw stablecoins as a partial answer to the privacy concerns raised by CBDCs, suggesting "regulated stablecoins can really be the solution" due to the safety and privacy they could offer.
Education also plays a critical role, according to Schrade.
The industry must do more to convey the benefits of blockchain technology and the importance of privacy, not just to the public but also to regulators.
This, he believed, was essential for improving the industry's reputation and fostering a constructive regulatory environment.
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As for the issue of transparency and corruption, Schrade acknowledged blockchain's potential to tackle these problems but warned of the privacy trade-offs.
He pointed out the need to resolve the tension between public scrutiny and personal data protection.
Schrade's discussion on DeFi protocol vulnerabilities underscored developers' need to take security seriously and for continuous auditing and verification to prevent hacks and scams.
Looking forward, Schrade anticipated the release of Elusiv's white paper detailing its compliance network technology.
As the digital asset landscape evolves, Schrade's commentary sets the stage for a broader discussion on the future of privacy and compliance in crypto, a topic that will no doubt be a highlight at the forthcoming Benzinga Future of Digital Assets conference on Nov. 14
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