Monero (XMR) has been on a downtrend since August. But over the past 24-hours, the privacy coin showed strong signs of recovery.
The price of Monero (XMR) jumped from $169.39 to $206.51 early on Wednesday morning, recording a steep spike of 22% in less than 6 hours.
This is the highest point XMR has reached since the end of January, and now means that Monero is up by 52% since its lowest point of $135.33 this year, which happens to coincide with the start of the war in Ukraine.
The surge came just before news broke about U.S. President Joe Biden’s executive order on cryptocurrency regulation.
The first-of-its-kind executive order addresses the lack of framework around the development of cryptocurrencies in the U.S. and seeks to promote its competitiveness. It also directs federal agencies to collaborate on drafting regulations for digital currencies.
Meanwhile, Coinbase (NASDAQ:COIN), the biggest U.S. cryptocurrency exchange, blocked 25,000 crypto wallet addresses of Russian origin yesterday. The accounts were reportedly suspected of illicit activities related to the evasion of economic sanctions placed upon Russia.
The Risk of Usage to Evade Sanctions
Western countries, like the EU member states and the United States, have continued to tighten economic sanctions on Russia due to its invasion of Ukraine. International businesses are seemingly fleeing the country as the ruble’s course dwindles to historic lows, with Russia being driven into isolation not seen since the Soviet era.
At the same time, the number of cryptocurrency users in Russia has climbed massively since military operations commenced. Concerns therefore arose that the country’s officials, politicians and oligarchs would try to circumvent the sanctions by using digital currencies.
To prevent any back doors being used by war-related entities and individuals to move their funds, financial institutions, including centralized crypto exchanges, have been strengthening due diligence procedures in order to take action against suspicious transfers.
Privacy Coins More Difficult to Track
It is therefore likely that the sudden demand for Monero (XMR) and Zcash (ZEC) is not incidental. Contrary to public digital currencies like Bitcoin, privacy coins are notorious for their untraceable nature.
Created to be coins with the anonymity features, privacy coin blockchains are capable of obscuring transactions by mixing XMR payments with other crypto transactions. This makes it almost impossible to link them to any specific identity or previous transactions.
This also pairs with reports that Monero (XMR) is one of the most common cryptocurrencies used for illicit transactions.
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