Interest in Monero Persists as CBDC Fears Grow – XMR Resists Major 7-Day Volatility with Modest 2% Decline

For multiple years now, governments from around the world have been announcing intent to develop and launch Central Bank Digital Currencies (CBDCs).  As a result, fears surrounding what the launch of such products would mean have also continued to grow, creating an increasing interest in privacy-focused alternatives like zCash, Dash, and the most popular option – Monero (XMR).

Although this interest has not yet led to a spike in price among most options, XMR in particular has managed to remain relatively stable over the past week while the rest of the market floundered.

7-Day Metrics

Before taking a look at why Monero is currently the top option for maintaining privacy in a world soon to be inundated with CBDCs and the resulting government oversight, here are a few pertinent metrics from recent days for XMR.

One of the draws towards Monero beyond privacy is often its userbase.  While Dogecoin aficionados – and scores of other projects – take part in full on speculation that sees the popular meme-token rise and fall on the whims of influencers, those underpinning the Monero network are typically more ideologically driven; allowing for the project is often able to avoid major price swings.  This was on full display this past week, with XMR experiencing only a modest 2% drop while most top projects were approaching losses of >10%.

Not only has Monero boasted relative price stability in recent days, it has managed to steadily increase its marketcap for nearly two months now.

XMR Marketcap (Mar. 9 – Apr. 24)

While Dash was also making respectable gains to its marketcap since 2023 began, there was an abrupt reversal of course days ago leading to a 20% decline when the SEC listed the project as a security in its lawsuit against once-popular digital asset exchange, Bittrex.  With this being the case, it would be reasonable for privacy-focused enthusiasts to seek out projects with a similar agenda.  With zCash fading into obscurity and now the 73rd largest project by marketcap, Monero may prove to be the biggest benefactor in the short term.

For the time being, the majority of trading volume involving XMR is occuring on a trio of exchange – BTSE, Binance, and KuCoin.

Why CBDCs Are Dangerous

As stated, XMR has been a relatively stable performer during a week which saw market-wide declines in price greater than any experienced in months.  This may be in part due to an increasing amount of interest being paid to such projects in light of increased focus being paid towards CBDCs by world governments.

While on the surface a CBDC may sound like a good idea – bringing more efficiency to current financial systems, easier dissemination of funds, etc. – under the surface they are potentially one of the biggest threats to privacy ever seen.

As their name implies, a CBDC is a digital currency issued and managed by a nations Central Bank.  Where the danger arises is in the potential for abuse of power.  CBDCs provide their issuers with unrivaled oversight on the activities, spending habits, financial stability, political leanings, geographical positioning, and more of their users.

Depending on their structuring, adoption and usage of a CBDC has the potential to be akin to acceptance of a totalitarian government.  They are a wolf in sheep clothing, being pushed by governments as a better alternative to decentralized options like Monero, that are essentially a trojan horse meant to allow for increased control measures.

Despite the increased power they may afford issuers, not all government representatives are on board with their use due to the potential dangers.  For example, in the United States, Florida Governor Ron DeSantis, along with Presidential candidate R. Kennedy Jr. have each taken strong stances against their adoption, going so far as introducing legislation that would ban their use, based on the potential for mass surveillance and control.

The Best At What it Does

Taking the above dangers in to account, Monero becomes one of the top alternatives for those looking to escape all-encompassing government oversight.  Not only it the network seasoned and robust, its use of ring signatures, stealth addressed and features like Kovri make it arguably the best at what it does.

While less of a factor when compared to being private and untraceable, Monero also plays in to the narrative of ‘Be Your Own Bank' – a phrase increasingly repeated in recent months as investors look to decrease counterparty risk in the wake of multiple bank collapses.

It is important to note that networks like Monero are not just utilized by criminals trying to hide shady activity.  For every one of those individuals, there are scores more that are simply trying to hold on to what little privacy can still be attained in a digital world where consumer data has become amazingly valuable for marketing, AI training, and more.

Headwinds

Although Monero may have proven resilient once again over the past week, this may just be a last gasp before another downward movement.  For Monero in particular, there are three major headwinds preventing an upward trajectory – regulators imposing KYC/AML requirements, upstart competitors, and fears of exchange de-listings.

However, having been around since 2014, Monero has repeatedly proven its resilience as it managed to weather multiple crypto-winters and outlasted countless competitors, all while remaining a top-50 project.  As more investors learn about CBDCs and become apprised to the dangers they pose, there is no reason to think that the narrative of resilient privacy afforded through Monero will not continue.

To learn more about Monero, make sure to check out our Investing Guide HERE.