Lately, we have seen the rise of privacy coins in late 2024 and throughout 2025 due to increased pressure on compliance with global AML laws. The same trend is expected to continue in 2026 and later unless there is an AML
What are Privacy Coins: How Do They Differ From Bitcoin and Ethereum?
Increasing Centralization of Crypto Projects
In the past, we have noticed that several large projects that once supported anonymity have somewhat centralized their technology. A few notable names that did it because of regulatory pressure are Circle, Tether, PayPal (PYUSD), and RLUSD. Upon investigation, Droom Droom found that these projects can now freeze user funds and have also granted law enforcement agencies access to surveillance.
https://twitter.com/pashov/status/1688591468498239496
Increasing KYC Rules
KYC is the primary arm of authorities to combat money laundering. However, this has resulted in collateral damage for retail users. As a result, the privacy of common users like us gets violated, although unintentionally.
Further, since cryptocurrencies are not yet mainstream, there is an increased risk of alienation from policy which is more geared towards traditional finance.
https://twitter.com/NoToDigitalID/status/2001315628737605958
Increased Violation of Privacy
These days, data can be collected from anywhere. Data points such as browser history, online browsing, and even passwords are not very safe. Even in traditional banks, any employee can see the funds lying in your account, possibly alerting criminals, whether intentionally or unintentionally.
As a result, there have always been financially motivated physical crimes.
Those who wish to safeguard their funds find it difficult to get their needs met in traditional finance and therefore turn to crypto projects like ZEC.
https://twitter.com/PixOnChain/status/1895282223705956564
Market Rotation
Several cryptocurrencies come and go in and out of trends because of market rotation. In 2024, there was a market rally in memecoins; the market attention then shifted towards AI cryptocurrencies and AI-allied sectors. Soon, the market turned its attention towards utility cryptocurrencies. Then, in late 2025, the market attention shifted towards privacy coins.
Bypass Sanctions
Privacy features of blockchains help several companies avoid global and local sanctions resulting from trade wars, conflicts, or financial differences across economies.
As a result, several companies have been using them to encash cross-border dues. Furthermore, since these technologies are very cost-effective, they become even more lucrative to use.
Institutional Interest
Several institutions have invested in cryptocurrencies, and because they track market trends more closely, they tend to invest in rising projects. Privacy coins have been among the major crypto narratives in the mid-2020s (2024-26), making them a treasured asset for Digital Asset Treasuries.
