The Crypto Underground Economy

[Abiky]

Let's talk about the underground economy for a bit. We all know governments are keen on launching CBDCs of their own. Their plan is to remove physical cash from existence, to curb criminal activities in the real world. All in an effort to increase surveillance tactics, and gain more power over people's financial life. The underground economy, although "illegal", is what usually makes the world go round. Without cash, the black market and other illicit ventures won't have an anonymous medium of exchange. That's where privacy coins come in. I wonder if they will quickly be adopted by the underworld, or outright rejected for something else?

Do you think the underground economy will be backed by privacy coins such as Monero or Grin in the future? If not, why? Your input would be greatly appreciated.

[viljy]

Cryptocurrencies, in particular XMR, have long been used in the shadow economy. Only they are used at the lowest levels. For example, drug trafficking is a major area of this "hidden economy." Cryptocurrency circulates there in an environment close to the end user. Large "operators" use ordinary money. Moreover, they are served by top banks.
Or do you think that the richest families in the world will give such a market to some criminal clans, who for them are essentially beggars from the alley? No way. The drug trade has always been in the hands of the richest families in the world.

For example, why were huge areas planted with poppies during the 20 years of the occupation of Afghanistan? And then, after the US fled from there, the Taliban destroyed all poppy crops and Afghanistan ceased to be a global heroin factory. It is clear that those who sell heroin by the tens of tons do not need cryptocurrency payments. Because there is simply no one in the world who could prevent them from paying with ordinary money, and, for example, through their own top bank. Well, at low levels, anonymous cryptocurrency is quite successfully used for criminal transactions.

[Ziskinberg]

Do you think the underground economy will be backed by privacy coins such as Monero or Grin in the future? If not, why? Your input would be greatly appreciated.

If there is no other option, they would likely resort to using it because their activity will never stop just because the government stops producing physical cash.

That is why crypto is here, and if they use Bitcoin, there are still mixers that can make transactions harder to trace, though not 100% anonymous since there are still transactions that get caught even after passing through mixers.

But Monero is still one of the coins often mentioned when people talk about privacy.

[Marvelockg]

Their plan is to remove physical cash from existence, to curb criminal activities in the real world. All in an effort to increase surveillance tactics, and gain more power over people's financial life.

The biggest advantage of cash is it simplicity and with that CBDC and every form of digital banking will rather exist as a complement to the fiat rather than a replacement to it regardless of the privacy conversation hovering around digital finances.

Another issue is that there is a  major weakness of privacy coins and that is the fact that eventually people want to spend wealth in the real world either for Food, Transportation or Consumer goods. If most merchants and employers operate within regulated systems, then converting privacy coins into usable purchasing power becomes one of it vulnerability.
in summary, privacy coins are more likely to become one pillar of a future underground economy rather than its universal foundation.

[Oshosondy]

Let's talk about the underground economy for a bit. We all know governments are keen on launching CBDCs of their own. Their plan is to remove physical cash from existence, to curb criminal activities in the real world.

Criminal activities can not be ceased. Even as they try to stop it, I do not think it reduced. Just make sure you do not fall victim of the criminal activities.

Are the governments still going for CBDCs? A currency that is not needed in the society. Digital fiat that people can transfer through their bank apps or through internet banking is enough.

All I know is that their is adoption in privacy coins, but the grin that you mentioned will be one of the last that can come to my mind because of its low marketcap.

[Die_empty]

Do you think the underground economy will be backed by privacy coins such as Monero or Grin in the future? If not, why? Your input would be greatly appreciated.

The shift is not to totally make cash obsolete but to promote a hybrid economy where cash and online transactions would work together.

Cash continues to play an integral role in the UK’s payments ecosystem and the Government is committed to ensuring consumers and businesses have a choice of payment methods to meet their needs.

The underground economy would always have means of engaging in financial transactions. If cash goes out of existence, privacy coins like Monero (XMR) would be a good option. Even direct exchange of goods and services or the barter system could also become popular. The underground economy would always embrace means that cannot be easily traced.

[Alpha Marine]

These days, the underground economy, especially drug syndicates and illegal arms dealers, looks for ways to clean its money. Even though they still believe in cash, they try to have legitimate businesses that won't get tied to them, even when they are arrested. They build restaurants, hotels, casinos, nightclubs, car dealerships and many other businesses. I believe that is how it would be in the future. They even clean their money and buy stocks of various companies through proxies.
Even though they may lean towards privacy coins a bit, it won't be significant enough to say it was backed by privacy coins.

I think the people who would use privacy coins more are hackers and scammers.
Criminals like top drug dealers like to do business with actual people; that is why they would keep working with actual accountants who move their money around in various offshore accounts that would be impossible or difficult to connect to them, and they can easily "pay a visit" to the person or his family to anybody in the operation who tries to fuck them.
 

[Spaceman1000$]

Let's talk about the underground economy for a bit. We all know governments are keen on launching CBDCs of their own. Their plan is to remove physical cash from existence, to curb criminal activities in the real world. All in an effort to increase surveillance tactics, and gain more power over people's financial life. The underground economy, although "illegal", is what usually makes the world go round. Without cash, the black market and other illicit ventures won't have an anonymous medium of exchange. That's where privacy coins come in. I wonder if they will quickly be adopted by the underworld, or outright rejected for something else?

Do you think the underground economy will be backed by privacy coins such as Monero or Grin in the future? If not, why? Your input would be greatly appreciated.

Government plan is not to remove cash, the reason why they even have CBDCs is for them to even have a sort of crypto currency that they can control, if they really want to be neutral, they should outrightly adopt Bitcoint or any other cryptocurrency that is decentralized. So I believe the idea of removing physical cash in a bid to curb anonymous medium can be replaced by CBDcs, because at the end of the day the government controls the both medium.

[YOSHIE]

Do you think the underground economy will be backed by privacy coins such as Monero or Grin in the future? If not, why? Your input would be greatly appreciated.

In the past, since the crypto mixer service operated freely here, there were millions of dollars that triggered an economy called underground/illegal transactions, transactions were supported by the Monero and Dash crypto types, the goal was one so that all transactions could not be traced.

I am sure that if CBDC is successfully developed, it will be supported by Monero or Grin of course, but because this CBDC is fully controlled by the government, so as not to trigger a wave of underground economics.

I am sure that with the system being developed/the CBDC network, taxes, making this report will make it difficult for the underground economy to move.

[Odogwu-Blockchain]

Underground economy can never be stopped no matter what, no governmental agencies will declare the end of using cash and it happens, it isn't possible because almost every sector uses cash for illegal payments. In my country, many workers in many sectors request for cash payment as a form of bribery. No bribery payment had ever done through mobile banking transfer because it will implicate them.

If cash payment actually stopped, then the introduction of privacy coin will be accepted by them, sure of this.

[Mhizlove]

Even though privacy coins gain more attention tomorrow or in the future, adoption won't depend alone on privacy. The people will also consider things like acceptance, easy to use, liquidity and if they can easily exchange it for local currency or for goods and services. Fir me I will say that cash still has more advantages than digital assets that may unlikely to replace completely. So instead of one option completely taking over, we can see different payment methods or means existing alongside each other depending on people's needs or on the situation.

[asriloni]

Firstly, US already halt CBDC. So i don't think this is gonna happen because they're sticking to the Genius act as CBDC replacement. So CBDC idea is not longer relevant.

Secondly, Monero is already the mostly used crypto in the dark web. As i know Bitcoin was mostly used in the past, but since a public ledger coin like bitcoin no longer viable to hide tx. Dark web was shifting to the monero as their preferred currency.

So i don't think you need to speculate about the future of privacy coin in the dark web because it's already most used crypto there.

[TypoTonic]

Let's talk about the underground economy for a bit. We all know governments are keen on launching CBDCs of their own. Their plan is to remove physical cash from existence, to curb criminal activities in the real world. All in an effort to increase surveillance tactics, and gain more power over people's financial life. The underground economy, although "illegal", is what usually makes the world go round. Without cash, the black market and other illicit ventures won't have an anonymous medium of exchange. That's where privacy coins come in. I wonder if they will quickly be adopted by the underworld, or outright rejected for something else?

It's funny that you say this, because my country literally just banned privacy coins like a week ago: https://coinmarketcap.com/academy/article/philippines-bans-privacy-coins-under-new-crypto-listing-rules
Our local crypto exchanges are no longer allowed to list "anonymity-enhancing virtual assets", and they also tightened the rules and compliance requirements. Technically they're not illegal to own, but you can no longer trade them on licensed exchanges.

[jossiel]

Do you think the underground economy will be backed by privacy coins such as Monero or Grin in the future?

Isn't this happening already?

I think that aside from the privacy coins, there will still be mixers that will be part of it. Not only with bitcoin but also for the other altcoins that have this service.

Although to be honest if it's the underground, I think people there would still choose fiat if they want to remain anonymous but that's gonna be hand to hand transactions.

[shinratensei_]

Aren't they already being used as such? laundering money from hacks, and exploits by the billions. It's hard to ignore the fact that they are being used for that kind of illegal purpose already despite the envisioned privacy tool was to keep people's wealth hidden from unwanted eyes.
States are advocating for privacy coin banning and delisting to major exchange for a while. No major exchange are willing to list privacy coin anymore or risk losing their business.

[Agbamoni]

Government dont remove physical cash from existence. Even if they want to, the reason won't be to stop corruption. The reason should be for other things. It should be for other things like reducing the cost of
Printing local currencies and money laundering. Whether physical cash exist or not there will be a new way of scam in the society.

[Abiky]

These days, the underground economy, especially drug syndicates and illegal arms dealers, looks for ways to clean its money. Even though they still believe in cash, they try to have legitimate businesses that won't get tied to them, even when they are arrested. They build restaurants, hotels, casinos, nightclubs, car dealerships and many other businesses. I believe that is how it would be in the future. They even clean their money and buy stocks of various companies through proxies.
Even though they may lean towards privacy coins a bit, it won't be significant enough to say it was backed by privacy coins.

I think the people who would use privacy coins more are hackers and scammers.
Criminals like top drug dealers like to do business with actual people; that is why they would keep working with actual accountants who move their money around in various offshore accounts that would be impossible or difficult to connect to them, and they can easily "pay a visit" to the person or his family to anybody in the operation who tries to fuck them.

Non-tech savvy criminals can simply hire hackers to do their thing. They don't necessarily need to use privacy coins directly. All they need is someone knowledgable in crypto. The main challenge would be dealing with volatile market prices. That's a huge dealbreaker for the underground economy. It's why most criminals prefer cash. But when cash gets phased out due to the launch of CBDCs, what else would they use? They'll have no other choice but to embrace privacy coins.

One solution that comes to mind is a privacy stablecoin. Like a USD-backed stablecoin built using ZKPs (Zero-Knowledge Proofs) or other cutting-edge privacy tech. I know regulators will oppose such a thing, which is why this would only work if the stablecoin itself was decentralized. Sort of how USDS (formerly DAI) works. Except that it will be a completely private stablecoin. Worse-case scenario, criminals will simply go back to using Gold and/or Silver coins for buying/selling stuff. It's safe to say it's impossible to take down the whole underground economy.

[Alpha Marine]

Non-tech savvy criminals can simply hire hackers to do their thing. They don't necessarily need to use privacy coins directly. All they need is someone knowledgable in crypto. The main challenge would be dealing with volatile market prices. That's a huge dealbreaker for the underground economy. It's why most criminals prefer cash. But when cash gets phased out due to the launch of CBDCs, what else would they use? They'll have no other choice but to embrace privacy coins.

This could be a possibility, and a few of them might embrace the idea, but it would not be a widely adopted method in my opinion. Let's not forget that it is largely a hypothetical situation because cash won't be phased out just yet, even if a CBDC is created. Cash will still be here in the next 100 years.
The CBDC is not to phase out cash because they could have done that without creating a different currency.
Also, the demand for cash is favourable to the US dollar. In countries around the world, the legal markets and black markets exchange dollars for other currencies in cash; if you take this demand away, it would affect the value of the dollar.
Not to mention a bill is waiting for the signature of Trump to be passed that would suspend CBDC for at least 4 years.

[elda34b]

Also, the demand for cash is favourable to the US dollar. In countries around the world, the legal markets and black markets exchange dollars for other currencies in cash; if you take this demand away, it would affect the value of the dollar.

How much volume exist for that though? Compared to other venues like selling weapons or other stuff, is it that significant? I honestly find it hard to believe that cash will just disappear like that simply because agents and whatnot would benefit form using it more than just some random thug. If everything is digital, I wonder how they'll do their job in a remote location and whatnot.

[fruktik]

It's not just the criminal underworld that uses cryptocurrency, but also those who don't want to fund the state with taxes that increase almost every year. Small businesses are barely surviving in my country. Therefore, entrepreneurs are forced to resort to such measures and only accept cash that doesn't go through the register.

And remember about Venezuela. What happened there? Maduro seized power by force, and after that, the country's residents decided to refuse to pay taxes and make all payments in crypto. The regime received no tax revenue, and the bus driver decided to take radical measures – selling drugs and weapons. This helped him maintain power for several years. What was the outcome? I hope you already know.