Future of Financial Regulation and Cryptocurrency Privacy
Cryptocurrency privacy depends on whether governments take a high- or low-regulation approach. Under low regulation, privacy depends on market and technological factors; under high regulation, governments may restrict conversion to national currency or issue government-based currencies. By 2021 Japan and China outlawed anonymous cryptocurrencies.
Even where a cryptocurrency claims privacy, anonymity may not exist in practice, as shown by law-enforcement recoveries of illicit crypto. Under a high-regulation approach, governments may make converting crypto to national currency expensive or illegal, or issue a government-based cryptocurrency.
By 2021, both Japan and China outlawed anonymous cryptocurrencies. China's digital yuan offers few privacy protections, giving the government complete visibility ("controlled anonymity").