Indeed. KYC has a purpose though -- prevention of fraud, money laundering, etc. Getting rid of KYC without a similarly-effective solution for those things seems unlikely. Ideas?
That’s not really true. Most financial crimes are big operations facilitated by banks. Criminals love KYC because that’s a chance to make their operations seem legit.
If you get rid of cocaine, the need for rehab centers also vanishes.
There is no way to “get rid of cryptocurrencies” at this point save for shutting off the internet. It is not within the power of the state to prohibit, any more than prostitution or cocaine.
I could see some sort of certificate driven approach.
Customers and merchants generate a keypair and CSR. The CSR by design contains no personal information. You submit the public key/CSR and seperate identifying information to a KYC authority.
The government generates a signed certificate the bank can use to open an account, and the customer or merchant signs their transaction requests using their private key to associate them with the account.
The bank has a paper trail showing KYC was performed, but does not have any personal information about the participants, almost akin to the old "numbered Swiss account" cliche.
Ideally, the KYC authority deletes the personal data after issuing certificates, but I'd expect it would be more "information can be released under court order" or "revocation policy blah blah blah".
That's the level of tradeoff I'd expect is politically viable. Bank of America doesn't know you're buying hentai, but if it turns out the 1000-year-old character is actually 12, a court can lift the veil.
Preventing convenient payment technology only hurts the rest of us. If you want redundancy buy gold coins.