Privacy Coins in 2025: Monero, Zcash, and Alternatives

Table of Contents

1. Introduction
2. What Is a Privacy Coin?
3. Monero (XMR)
4. Zcash (ZEC)
5. Firo (formerly Zcoin)
6. Other Privacy Coins
7. Regulatory Situation
8. Can They Still Be Used Legally in France?
9. Outlook
10. Practical Guide
11. FAQ
12. Conclusion
13. Internal Links
14. Sources and Resources

Suggested URL: /privacy/privacy-coins-monero-zcash-2025

Category: Privacy and Anonymity

Summary: Comprehensive analysis of cryptocurrencies designed for confidentiality. Monero, Zcash, Firo: technologies, strengths, weaknesses, and the regulatory landscape in 2025.

Introduction

Bitcoin is not anonymous, but privacy coins offer real confidentiality.

Bitcoin is often presented as an anonymous currency, but this is a misconception. Every Bitcoin transaction is publicly recorded on the blockchain, traceable by anyone with the appropriate chain analysis tools. Bitcoin's pseudonymity offers limited protection against chain analysis companies that collaborate with governments.

Privacy coins propose a radically different approach: confidentiality is built into the protocol itself. Amounts, senders, and recipients are concealed using advanced cryptographic techniques, making chain analysis significantly more difficult — or even impossible.

But this promise of confidentiality comes at a cost: privacy coins are in regulators' crosshairs. Delisted from numerous platforms, banned in some countries, they exist in a permanent zone of tension between the right to privacy and transparency requirements.

1. What Is a Privacy Coin?

Cryptocurrencies designed to conceal senders, recipients, and amounts by default.

1.1 Definition

A privacy coin is a cryptocurrency designed to offer native transaction confidentiality. Unlike Bitcoin, where confidentiality is optional and limited, privacy coins incorporate cryptographic mechanisms that conceal:

1.2 Privacy by Default vs. Optional

Two philosophies exist:

Privacy by default (Monero):

• All transactions are private
• Impossible to distinguish a "normal" transaction from a "private" one
• Offers the highest level of anonymity

Optional privacy (Zcash):

• Users choose between transparent or private transactions
• Private transactions are distinguishable from transparent ones
• Less effective anonymity (reduced anonymity set)

1.3 Legitimate Use Cases

Financial confidentiality addresses real needs:

• Personal data protection: Preventing your financial history from being accessible to everyone
• Personal security: Not publicly exposing your wealth
• Business confidentiality: Protecting trade secrets
• Freedom under authoritarian regimes: Access to the economy for dissidents
• Anonymous donations: Supporting causes without repercussions

2. Monero (XMR)

The most robust privacy coin, with mandatory confidentiality and an active cypherpunk community.

2.1 Overview

Monero is the most widely used and technically robust privacy coin. Launched in 2014, it was designed from the outset for confidentiality.

2.2 Privacy Technologies

Monero uses three complementary technologies:

Ring Signatures

Each transaction includes multiple "decoys" among which the real input is found. An observer cannot determine which of the inputs is actually being spent.

Visible transaction:
Possible inputs: [A, B, C, D, E, F, G, H, I, J, K]
Real input:       One among the 11 (unknown)

Since 2022, Monero uses a ring size of 16 (16 possible inputs per transaction).

RingCT (Ring Confidential Transactions)

Amounts are concealed through cryptographic commitments (Pedersen commitments). The network can verify that inputs = outputs + fees, without knowing the actual amounts.

Stealth Addresses

For each transaction, a unique address is generated. The recipient's public address never appears on the blockchain. Only the recipient can recognize the funds intended for them.

2.3 Strengths

2.4 Weaknesses

2.5 Regulatory Situation

Monero is in regulators' crosshairs:

Acquisition in 2025: Primarily through decentralized exchanges (Bisq, LocalMonero closed), DEX, or P2P.

3. Zcash (ZEC)

Cutting-edge zk-SNARKs cryptography, but optional privacy that reduces its real-world effectiveness.

3.1 Overview

Zcash was launched in 2016 by a team of renowned cryptographers, with the support of the Electric Coin Company. It uses cutting-edge technology: zk-SNARKs.

3.2 zk-SNARKs: The Technology

Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge allow proving that a statement is true without revealing any information about that statement.

Application to Zcash:

• Prove that a transaction is valid (inputs = outputs)
• Without revealing amounts, sender, or recipient
• The proof is compact and quickly verifiable

3.3 Transparent vs. Shielded Transactions

Zcash offers two types of addresses:

Problem: The majority of Zcash transactions are transparent (~90%). Shielded transactions form a reduced "anonymity set," which weakens privacy.

3.4 The Trusted Setup (Controversy)

The initial generation of zk-SNARKs parameters required a "trusted setup": a ceremony where participants generated cryptographic parameters. If all participants had colluded, they could have created fraudulent ZEC.

Mitigations:

• Ceremony with ~100 independent participants
• Upgrade to Sapling (2018): new ceremony
• Upgrade to Orchard (2022): protocol without trusted setup (Halo 2)

3.5 Strengths and Weaknesses

Strengths:

• Cutting-edge cryptography (academic research)
• Ability to generate proofs for auditors
• Professional and funded team

Weaknesses:

• Optional privacy → reduced anonymity set
• Trusted setup history
• Less decentralization (centralized development)

4. Firo (formerly Zcoin)

Lelantus Spark protocol without trusted setup, positioned between Monero and Zcash.

4.1 Overview

Firo (formerly Zcoin) uses the Lelantus protocol to provide confidentiality.

4.2 Lelantus Technology

Lelantus allows "burning" coins and "reminting" them with an erased history. The Spark version (2023) adds:

• Hidden amounts
• Stealth addresses
• No trusted setup

4.3 Positioning

Firo positions itself between Monero (total privacy) and Zcash (optional privacy) with:

• Privacy by default for Lelantus transactions
• Transparent transactions possible
• Focus on cryptographic research

5. Other Privacy Coins

An overview of lesser-known alternatives, from Dash to Secret Network.

5.1 Dash

Dash initially offered "PrivateSend" (based on CoinJoin), but has repositioned itself as a payment cryptocurrency. The privacy feature has become secondary.

Verdict: No longer truly a privacy coin in 2025.

5.2 Secret Network (SCRT)

Secret Network does not target payments but rather private decentralized applications.

5.3 Pirate Chain (ARRR)

Fork of Zcash with mandatory privacy (all transactions shielded). Smaller community, less audited.

5.4 Dero

Proprietary technology (DAG + privacy). A more experimental project with less track record.

5.5 Summary Table

6. Regulatory Situation

FATF targets privacy coins, triggering massive delistings since 2020.

6.1 FATF Position

The Financial Action Task Force (FATF/GAFI) has identified privacy coins as a major risk for anti-money laundering efforts. Its recommendations:

• Enhanced surveillance of platforms handling these assets
• Traceability requirements for VASPs (Virtual Asset Service Providers)

6.2 Massive Delistings

Since 2020, privacy coins have been progressively removed from major platforms:

6.3 National Bans

6.4 European Regulation

The AMLR and MiCA regulations do not explicitly mention privacy coins, but:

• Traceability requirements make their trading difficult
• CASPs avoid these assets as a precaution
• No formal ban on holding them

7. Can They Still Be Used Legally in France?

Holding them remains legal, but buying becomes complex via DEX and P2P.

7.1 Holding: Legal

Holding privacy coins is perfectly legal in France. No legal text prohibits the possession of XMR, ZEC, or others.

7.2 Buying/Selling: Increasingly Difficult

Haveno: Decentralized DEX successor to Bisq, specialized in Monero.

7.3 Tax Declaration

Capital gains on privacy coins are taxable like any cryptocurrency:

• 30% flat tax on conversion to fiat
• Declaration mandatory

The difficulty: proving the acquisition price if the purchase was P2P without a paper trail.

TIP: Keep your proof of purchase (screenshots, correspondence) to justify your acquisition costs to the tax authorities.

7.4 Practical Risks

8. Outlook

Between potential bans and migration toward private Layer 2 solutions.

8.1 Privacy Coin Survival

Possible scenarios:

8.2 Evolution Toward Layer 2

A trend is emerging: instead of dedicated privacy coins, privacy is migrating toward Layer 2 solutions:

• Lightning Network (Bitcoin): More private off-chain transactions
• Aztec (Ethereum): Private Layer 2 with zk-rollups
• Railgun: Privacy on smart contract platforms

This approach can circumvent restrictions on privacy coins by adding privacy to regulated chains.

8.3 Continuous Improvement

Privacy coins continue to evolve:

Monero:

• Seraphis/Jamtis: New transaction protocol (in development)
• Full Chain Membership Proofs: Ring signature improvements

Zcash:

• Orchard (Halo 2): Deployed, eliminates the trusted setup
• Zcash Shielded Assets: Private tokens on Zcash

9. Practical Guide

How to choose, buy, and store your privacy coins in 2025.

9.1 Choosing Your Privacy Coin

9.2 Where to Buy (2025)

9.3 Storage

FAQ

Q1: Is Monero really untraceable?

No system is perfect. However, to date, no publicly known technique can systematically trace Monero transactions. Statistical attacks on small ring sizes have been demonstrated, but the current ring size (16) provides solid protection.

Q2: Why is Zcash less private in practice?

Optional privacy creates a problem: the majority of users choose transparency (by default or out of convenience). Private transactions form a small group, reducing anonymity. This is the paradox of optional privacy.

Q3: Is it illegal to own Monero in France?

No. Holding it is legal. Only trading via regulated platforms has become difficult following voluntary delistings by exchanges.

Q4: Can authorities break Monero?

Leaked documents suggest that certain agencies (IRS, FBI) have attempted to acquire Monero tracing tools. Their actual effectiveness is unknown. The Monero community operates on the assumption that attacks are possible and constantly improves the protocol.

Q5: Do privacy coins have a future?

Probably, but in a different form. Their usage could migrate to fully peer-to-peer channels, while mainstream privacy develops via Layer 2 solutions on Bitcoin or Ethereum.

Conclusion

Privacy coins represent a technical response to the problem of financial surveillance. Monero offers the most robust confidentiality, Zcash the most advanced cryptography, while alternatives like Firo attempt to find a balance.

However, their future is uncertain. Regulatory pressure is intensifying, access through traditional channels is closing, and their use requires increasing sophistication.

Key takeaways:

1. Holding privacy coins is legal in France
2. Buying is becoming difficult (DEX, P2P only)
3. Monero remains the benchmark for maximum privacy
4. Reporting obligations remain (capital gains)
5. Privacy on Layer 2 (Lightning, rollups) could become the mainstream alternative

Internal Links

• Bitcoin and Privacy - State of Affairs — The state of Bitcoin confidentiality
• Lightning Network - Privacy and Taxation — Layer 2 alternative
• CoinJoin and Mixing — Privacy on Bitcoin
• Buy Bitcoin without KYC — Legal methods
• AMLR and Anonymous Payments — Regulatory context

Related Articles — Privacy

• Lightning Network Privacy
• VPN and Tor for Crypto Transactions
• CoinJoin and Bitcoin Mixing

Sources and Resources

Official Documentation

• Monero: getmonero.org
• Zcash: z.cash, electriccoin.co
• Firo: firo.org

Research

• Monero Research Lab: Technical publications
• Electric Coin Company: zk-SNARKs research
• Academic papers: Studies on traceability

Community

• r/Monero: Active subreddit
• Monero Talk: Podcast
• Zcash Community: Official forum

Article written in December 2025. The availability of privacy coins on platforms is evolving rapidly. Check current conditions before any transaction.