Originally published at https://monstadomains.com/blog/privacy-coin-payments/
On 25 August 2026, two organisations with almost nothing in common shipped products that solve the same problem from opposite ends. Grayscale listed a Zcash ETF on NYSE Arca. THORChain shipped version 3.20 with native Monero and Zcash swaps. Both landed on the same Tuesday, and together they split privacy coin payments into two rails that are never going to merge. One runs through a regulated broker with your legal name attached to it. The other runs through code that never asks who you are. If you buy domains or hosting with XMR, that fork decides what your money looks like from here on.
The Day Privacy Coin Payments Got Two Futures
The timing was coincidence. The meaning was not. For years, privacy coin payments lived in a narrowing corridor between the exchanges that still listed XMR and the ones that had quietly dropped it. In a single trading session that corridor became two separate roads. Grayscale’s ZCSH gives institutions exposure to Zcash inside a wrapper regulators already understand. THORChain’s upgrade gives everyone else a route between XMR, ZEC, Bitcoin and stablecoins with no account, no custodian and no verification queue. Neither product replaces the other. They serve people with opposite goals, and both are now permanent fixtures.
Grayscale Puts Zcash On The NYSE Arca Tape
ZCSH began trading on NYSE Arca on 25 August 2026, converted from the Grayscale Zcash Trust that had existed as a private placement since October 2017. It is the first exchange traded product anywhere offering spot exposure to ZEC. Grayscale reported $313.5 million in assets under management the day before launch, following a roughly 45 percent run in ZEC over the preceding days. The management fee is 2.5 percent, steep for a spot vehicle, and Grayscale says it routes back into the Zcash ecosystem.
Steve Vanourny, Grayscale’s Head of Index, made the pitch in language privacy advocates would recognise. “As AI reshapes how financial activity can be monitored, we believe demand for genuine financial privacy will only grow,” he said, adding that Zcash has “a compelling long-term role to play” and that the firm wanted to make it accessible “through the exchange-traded product structure investors already know.” It is an unusual sentence to read from a company whose entire distribution channel is built on brokerage accounts, tax forms and identity verification.
What The 2.5 Percent Fee Actually Buys
Not privacy. A ZCSH shareholder never touches a shielded address, never holds a key and never makes a transaction that Zcash’s cryptography protects. They hold a security in a brokerage account that reports to a tax authority. The ETF is a bet on the price of privacy technology rather than a use of it, and that distinction is the whole story for privacy coin payments. Institutional demand for ZEC exposure does not put a single shielded coin into circulation for anyone trying to pay for something quietly.
THORChain 3.20 Deletes The Custodian
THORChain’s release does the opposite. Version 3.20 enables native swaps of XMR and ZEC against Bitcoin, Ethereum and stablecoins directly on the protocol. As Decrypt reported, users “do not need to create an account or hand custody of their assets to a centralized entity.” The same release added Protocol-Owned Liquidity, a Stable Reserve offering stablecoin swaps with zero liquidity fees, and renewed support for Solana, Base and BNB. The privacy coin integration is the part that changes how people actually move value.
It is the first meaningful upgrade to privacy coin payments infrastructure in several years. Until now, getting from XMR into Bitcoin or a stablecoin meant a centralised exchange, a custodial swap service, or a chain of intermediary steps that each collected something about you. Removing that requirement does not make privacy coin payments effortless, but it removes the single point where identity was most often demanded.
Native Assets, Not Wrapped Tokens
The detail that matters is the absence of wrappers. Earlier attempts at cross-chain privacy coin payments relied on wrapped representations, which meant an issuer somewhere held the real asset and could freeze the synthetic one. THORChain settles in the native asset on each chain instead. There is no wXMR contract with an admin key, and no bridge operator maintaining a list of who swapped what. For anyone whose threat model includes a subpoena served on an intermediary, that architectural choice is worth more than any policy promise a company can make.
Why Delistings Made This Split Inevitable
Neither launch happened in a vacuum. Centralised exchanges have been shedding Monero for over two years. OKX removed XMR, ZEC and DASH pairs in January 2024. Binance delisted XMR globally on 20 February 2024 and later converted residual balances to USDC. Kraken pulled Monero in Ireland and Belgium in June 2024, extended the removal across the entire European Economic Area on 31 October 2024, then delisted XMR in Canada and India in April 2026. Each removal narrowed the on-ramp for privacy coin payments a little further.
The pattern explains why both August launches were built the way they were. Grayscale chose Zcash rather than Monero because Zcash privacy is opt-in and its transparent addresses give a regulated issuer something to point at. THORChain supports both, because a protocol that never takes custody has no delisting committee to satisfy. The delistings did not kill privacy coin payments. They sorted privacy coin payments into the two categories that went live on the same day.
What This Reveals About Privacy Coin Payments
The clearest lesson is that regulatory acceptance and practical usability have fully decoupled. ZCSH is the most regulator-friendly privacy coin product ever launched in the United States and it is useless for actually paying anyone. THORChain 3.20 is the most usable route for privacy coin payments in years and it exists precisely because there is no counterparty to regulate. Anyone still waiting for the two to converge into one compliant, convenient option now has a clear answer, and the answer is no.
The second lesson concerns which privacy model survives contact with institutions. Zcash’s optional shielding is what made an ETF possible. Monero’s privacy-by-default architecture is exactly what kept it off the same tape. That is not a verdict on which chain is better designed. It is a reminder that any privacy feature you can switch off is a privacy feature someone will eventually ask you to leave off, and that privacy coin payments built on optional protection inherit that pressure permanently.
The Travel Rule Backdrop Behind Both Launches
Both products were designed against the same compliance backdrop. The crypto Travel Rule now requires sender and recipient information to travel alongside transfers, with thresholds that vary sharply by jurisdiction: zero in the European Union under the Transfer of Funds Regulation, zero in the United Kingdom, and $3,000 in the United States. Regulators are actively debating whether the American threshold should fall, particularly for cross-border transfers and transactions touching self-custodied wallets. The European Banking Authority has been drafting frameworks requiring providers to verify ownership of unhosted wallets.
Enforcement has teeth. Regulators issued 139 fines totalling $1.23 billion for AML, KYC and sanctions violations in the first half of 2025, a 417 percent jump in value over the same period a year earlier. That is the environment any custodial service handling privacy coin payments has to survive, which explains why so few of them bother. We covered the European half of this story when the MiCA rules reshaped crypto payments, and the same logic drove the fight over stablecoin payment privacy.
Handling Privacy Coin Payments After The Split
If you hold XMR to pay for infrastructure, the practical change is that you now have a non-custodial exit that never asks for a verified account. Test it with a small amount before you depend on it, and understand that a swap through a public protocol is still visible on the transparent side of the trade. Choosing carefully which asset you land in matters more than the swap itself, because that is the leg that leaves a permanent record.
The second change concerns vendor selection. A merchant that accepts XMR directly is worth more to you than one that accepts only a stablecoin you have to acquire through a verified exchange account, because the second option quietly reintroduces the identity check you were trying to avoid. That is the practical test for privacy coin payments now: does the payment path touch a verified account at any point? If it does, the privacy ends there. Paying to register a domain without ID checks only works when every step of the chain is clean.
Third, resist reading the ETF as good news for your own privacy coin payments. It is good news for ZEC’s price and for the credibility of the cryptography behind shielded transactions. It changes nothing about whether you can spend the asset without identifying yourself. Treating institutional adoption as a proxy for personal privacy is how people end up on regulated rails they never intended to use.
The Takeaway
Three things came out of 25 August. Privacy coin payments now run on two incompatible rails, one regulated and useless for spending, the other non-custodial and genuinely practical. Zcash won institutional access because its privacy is optional, which is a warning as much as an achievement. And the long run of exchange delistings that looked like a slow defeat turned out to be the pressure that forced the better architecture into existence. MonstaDomains has taken crypto without identity checks since day one, and if you want the same standard on the names you already hold, start with WHOIS privacy protection.
