The German Ministry of Finance has releases a report which, among other things, says that Monero, Zcash and other privacy-focused cryptocurrencies, might overtake Bitcoin in terms of use in illegal activities.

Just a week prior to the report, German police had investigated a 0.1 BTC transfer which was sent to the wallet of the Halle synagogue killer, whose attack was allegedly funded by the local far-right community.

According to the 'First National Risk Analysis for 2018/19', the German financial regulator found out that Monero is more popular among users who seek anonymity and are more likely to engage in money laundering and terrorist financing activities on the dark web.

The report examines further the current circulation of cryptocurrencies in the dark web, focusing on those used in criminal activities, as well as cryptocurrency exchanges, wallet provider companies, and other crypto-services brokers that operate in Germany, as part of a national wave of actions amended in line with the recent EU anti-money laundering act subjecting virtual assets in the "investigation queue" of AML actions.

While the report suggests that Germany does not have enough data on Bitcoin and illegal activities, recent research suggests that crypto fundraising is becoming popular among terrorist organizations.

Furthermore, the document manages to distinguish between pseudo-anonymous and anonymous cryptocurrencies, citing that pseudonymity still enables investigations on public blockchains, while anonymity-focused coins such as Monero or Zcash are practically untraceable due to the issuer's policy, making the specific cryptocurrencies suitable for use in illegal activities. While these cryptocurrencies can empower everyday people by providing financial privacy, innovative technologies can often be a double-edged sword.

On one hand, it might seem like Germany is pushing cryptocurrencies away from adoption, but from another perspective, understanding, regulating, and providing information about various cryptocurrencies might be just the hit what crypto needs to enter mainstream use.