Opinion: Carter Feldman, CEO of Psy

For thousands of years, money has changed hands in private hands. The bronze coin was passed from merchant to customer, leaving no trace of the transaction. No government official knew what you were buying and from whom. No bank monitored your spending habits. It wasn’t a glitch in the system – it was the way money worked.

Even as banking systems evolved, privacy remained the default. When paying for beer with a banknote issued by an institution such as the Bank of England, the tavern was not obliged to verify a real identity card or know its customer (KYC).

When paper money first appeared in medieval China and later in state-of-the-art Europe, it functioned as an anonymous, negotiable bearer instrument. Ownership changed by physical exchange rather than personal identification. For centuries, governments did not know what was being spent where, and the state had to rely on audits, witnesses and testimonies.

This all changed relatively recently and within living memory. Credit cards in the mid-20th century began to consolidate spending into neat, searchable records. Regulations introduced in the 1970s required banks to verify customers’ identities and report suspicious transactions. International networks have standardized the transmission of transactional messages across borders. Each step seemed reasonable on its own: fraud prevention, anti-money laundering, and enforcement. Together, however, they built the infrastructure for completely unprecedented financial supervision.

An experiment from 70 years ago

The Internet has sped up everything. Online bank accounts, digital cards and mobile payments record not only what you buy, but also when, where and on what device. Payment platforms include identity verification and behavioral analysis from the beginning. They assess your risk profile in real time. Comfort was paramount and supervision was implemented.

Now central banks are getting closer to the source. Central bank digital currencies being developed in China, Europe and America would allow governments to issue money directly to users in digital form. Unlike cash, these systems are designed to be traceable from day one. You can promise privacy protection (as in the case of the EU), but the potential for visibility and control is often structurally built into the design.

Governments now have access to your spending history and who you transact with. They can also freeze accounts at will. Canada did it Protesters in the Freedom Convoy in 2022 Georgia froze bank accounts NGOs that provided legal and financial assistance to arrested protesters in March last year, prompting Amnesty International to condemn the move as a “blatant attack on human rights.” A transitional government in Syria ordered banks to freeze accounts associated with figures of the former regime.

There are morally defensible and intellectually coherent arguments to support some of these cases. However, state-of-the-art national security laws around the world often leave defendants little legal freedom to argue their case. Their accounts may eventually be unfrozen, but the initial penalty cannot be undone.

Bank accounts are a lifesaver for most people, and freezing them is tantamount to coercion. No one can be expected to struggle when cut off from the basics of life. It’s really not a fair fight.

The case of private digital cash

When governments can freeze accounts linked to political protests, the importance of alternatives becomes even more obvious. Privacy-focused cryptocurrencies like Monero (XMR) or Zcash (ZEC) offer a return to normal. It enables direct, permissionless exchanges between individuals, without the need for identity checks or centralized supervision. It is essentially a kind of digital return of what was once delivered in the form of coins and cash.

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Yet in our upside-down discourse, privacy-preserving cryptocurrencies are labeled an aberration. Critics call it suspicious, radical and threatening. The 70-year experiment of financial supervision is treated as normal. The thousand-year-old tradition of private transactions is treated as strange.

Critics often portray privacy coins as illicit financing tools. This ignores their broader social utility. Just as cash enables lawful, private purchases, private cryptocurrencies protect freedoms in increasingly monitored digital environments. In countries with authoritarian regimes or unstable banking systems, private digital cash may be the only way to safely store and transfer value.

Society already tolerates private cash transactions without criminalizing the medium itself. It does not ban £50 notes on the grounds that someone might misuse them. The same logic should apply to privacy-preserving digital assets. Instead of being seen as a threat, they should be treated as state-of-the-art equivalents of physical money: useful, legal and consistent with centuries of financial tradition.

While cryptocurrency can certainly be a way to challenge central bankers, its deeper value lies in preserving the kind of private exchange that existed for millennia before surveillance-based money took over.

The real aberration is not private cryptocurrencies; is the assumption that every financial transaction should be noticeable to third parties, subject to algorithmic analysis and susceptible to political interference. We are not asking for special privileges; we defend the norms that existed until approximately 1950.

When critics characterize privacy coins as suspect, they are arguing that natural human commerce is inherently criminal. They treat the thousand-year tradition of private transactions as abnormal and the 70-year experiment in financial supervision as normal. Defenders of the current status quo should take a longer look at history.

Opinion: Carter Feldman, CEO of Psy.

This article is for general information purposes and is not and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.