The European Union is set to implement a ban on privacy coins and anonymous crypto accounts in 2027, reflecting a global trend among regulators to strengthen anti-money laundering (AML) measures. According to the Anti-Money Laundering Regulation (AMLR), financial institutions and crypto service providers will be prohibited from processing privacy coins such as Monero (XMR) and Zcash (ZEC), and will be required to perform mandatory identity verification for transactions exceeding 1000 euros. This move aims to curb illegal fund flows but may stifle innovation in privacy technology and force users who rely on anonymity to shift to less regulated areas, such as Dubai.

In the short term, the privacy coin market has experienced panic selling, with XMR and ZEC prices dropping over 7% and 5% respectively, and exchange outflows surging. In the long run, although self-custody wallets are not directly banned, their anonymity features will be restricted, and tools such as mixers may also be assessed as high-risk. The 'double-edged sword' effect of regulation is evident: on one hand, it enhances compliance, while on the other hand, it may drive the iteration of decentralized technologies and even give rise to more covert transaction methods. The balance between privacy and compliance remains a core challenge for the crypto industry.