On December 18th 2020, the Financial Crimes Enforcement Network (FinCEN) issued a proposal for a new set of rules for certain digital currency transactions. More specifically, the rules set out to impose new reporting, record keeping, and identity verification requirements upon banks and money service businesses for certain transactions involving what is termed “unhosted” (self-custodied) wallets. On January 4th,The Monero Policy Working Group (MPWG) submitted a response for comment from the perspective of privacy preserving technologies.

This is the first post in a two part series from the MPWG that will be aimed at fostering a wider dialogue around the proposal, the MPWG’s response, and the potential implications for Monero specifically, and financial privacy more generally. This first post will focus upon a specific area of the proposal - collection of Counterparty name and physical address for certain transactions - that the MPWG believes would have a net positive impact on Monero usage should the proposal come into effect in its current form.