U.S. lawmakers have introduced the Lawful Access to Encrypted Data Act (LAED), a bill that could give the government near-total access to user data. Nevertheless, cryptocurrencies like Bitcoin, Monero, and Zcash will continue to provide users with protection.

LAED would give governments backdoor access to encrypted data, greatly reducing the privacy of individuals in the U.S (and presumably foreign individuals using U.S. services).

The new bill has a much larger scope than EARN IT, another anti-privacy bill. Whereas EARN IT would only affect online services, LAED would also affect virtually any digital device with storage greater than 1 GB—from smartphones to computers and everything in between.

LAED would require the companies responsible for products and services to provide technical assistance in decrypting the data in question.

For online data, this rule would apply to all captured data. For stored data, companies would only provide assistance with data obtained through court orders.

If LAED is passed, the consequences would be far-reaching and nearly inescapable for tech companies.

Companies can only resist the bill by showing that compliance is impossible. For example, if encryption is provided by a third-party, the company may not need to cooperate. But even then, the U.S. government could order the company to redesign the service and comply.

Speculatively, it seems that virtually every open-source project, including Bitcoin, would not be allowed to operate under LAED. With no way to circumvent Bitcoin cryptography and no single entity that can be held accountable, Bitcoin could not possibly comply with LAED. The situation is similar with Monero and Zcash.

Other privacy projects, like Zcoin, Verge, DASH, Horizen, PIVX, and Beam could provide similar protections depending on their level of decentralization.

Of course, those qualities also mean that it would be challenging for the government to shut down Bitcoin. On the other hand, LAED could encourage new blockchain startups to leave the United States—a trend that is already in progress due to unrelated regulations and securities laws.

LAED was introduced by three Republican senators (Tom Cotton, Tom Cotton, and Marsha Blackburn). By contrast, the EARN IT bill has ten bipartisan supporters.

Some critics have suggested that LAED was designed to be “dead-on-arrival,” and that LAED only exists to make EARN IT look like a more reasonable option despite the fact that it contains similar privacy overreach.

As of June 26, neither bill has been enacted in law. EARN IT, however, is still on the senate’s agenda.

In any case, the gradual erosion of privacy through past laws (such as FOSTA/SESTA) and more recent contact tracing laws mean that governments will almost certainly continue to introduce more anti-privacy measures.

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