ZCash TEX addresses are a special type of receiving address that requires funds be sent from Transparent Addresses. TEX addresses make it impossible to send funds from a Shielded Address. In practice that means you will need to send funds from your Shielded Balance to one of your own Transparent Addresses and then from here to the receiver's TEX address. The technical proposal for TEX addresses is ZIP 320: Defining an Address Type to which funds can only be sent from Transparent Addresses.

Why were ZCash TEX addresses created?

Due to governments weaponizing money against protestors, citizens of countries they disagree with, etc they are increasingly interested in stripping people of the human right of privacy. As a result they are creating more regulator pressure on intermediaries like Binance. This has resulted in policies such as all funds deposited into Binance must come from a transparent address. This requirement meant Binance gave an ultimatum of either enforce this at the protocol level or we will delist ZCash and the result was that TEX addresses were born.

Do ZCash TEX addresses decrease privacy?

In our view, TEX addresses do not decrease privacy much for those people who take privacy seriously. Some people may reduce usage of shielded balances which would negatively effect their privacy. For those people that will only send to a TEX address from a transparent address that was funded from Shielded Balance, then privacy implication is minimal. We do see potentially increased ability of node operators to be able to make stronger correlations of users via metadata under this scheme. However, our ZCash Wallet will always be designed to reduce this type of tracking.

Now that ZCash has TEX addresses is it regulatory compliant?

Considering that TEX addresses do not significantly impact most people's privacy and the goal of government overreach is to strip away privacy, then our guess is that this change will only be the first of many demands. In the future governments will make additional requirements to strip away privacy. Ultimately, in our view, the future of ZCash exchanging will need to be decentralized and ZCash Wallet will support this.