ZCash, the cryptocurrency notorious for its fierce protection of privacy, has finally had to make the switch and arrive on one of the most reputed crypto exchanges in the world, Coinbase.com. Prices of this private-transaction crypto fell on Nov 30, since regulations do not allow full transaction shielding.
Last week, the coin was integrated into the professional services category on the platform – the Coinbase Pro. However, the cryptocurrency, popularly known as Zcash is not available in New York state or in the United Kingdom. Other jurisdictions are expected to be added at a later date.
Defies Coinbase effect
ZCash prices saw a surprise dip in prices on November 30, contrary to popular belief that listed currencies typically rise on Coinbase upon their debut or the “Coinbase effect” proved to be wrong in the case of Zcash.
According to a statement issued by the exchange,
“Unencrypted/transparent version of the protocol allows third parties to see metadata associated with the communication or transaction, while the encrypted/shielded version protects this information. Initially, customers can send ZEC to Coinbase from both transparent and shielded addresses, but only send off Coinbase to transparent addresses.”
Future support for shielded transactions
The exchange which has been working closely with the regulatory body of the United States, the Securities and Exchange Commission (SEC) by complying with rules such as reporting transactions for ease of operations in the country has proposed that in the future it hopes to offer privacy-support for cryptocurrencies such as ZEC.
The community appears to be divided on move by ZCash to move towards the common trading exchange, but many accept that it will actually allow the crypto to gain in value by being easily accessible on the world’s most popular exchange.
However, the bottom line remains that Zcash may have to lose out on its characteristic privacy because of this mainstream integration on the trading platform. SEC demands that Coinbase delivers on the FINRA as well as the Know Your Customer and Anti-money Laundering laws.
Hence, theoretically, ZEC would be contradicting its core feature of privacy, since these laws now demand that every currency effectively exposes the identity of the customer who uses ZEC at Coinbase.
Zooko Wilcox founder Zcash tweeted,
“As the industry matures, we believe privacy protections will be mandated by most exchanges, governments and other financial institutions, leading to the broad adoption of Zcash.”
— zooko (@zooko) November 29, 2018
Coinbase.com has commenced support for ZEC via apps on Android as well as iOS, thereby allowing all users to receive, buy and sell and even store their ZEC on the platform.