Cryptocurrencies are becoming popular in nations that are regarded to be corrupt or have severe capital controls, according to a recent analysis by the International Monetary Fund, bolstering the case for stronger regulation of the industry.
According to the group, the analysis demonstrates why countries may want to compel intermediaries, such as digital currency exchanges, to follow know-your-customer processes, which are ID verification requirements aimed to combat fraud, money laundering, and terrorism financing. Some countries, such as the United States, have already implemented such controls.
Nations all over the world are debating the best method to regulate the $2 trillion cryptocurrency market, with levels of regulation differing widely from one jurisdiction to the next.
The findings suggest that crypto assets could be used to “transfer corruption proceeds or avoid capital regulations,” according to the organization, which did not name specific countries.
The IMF said it based its baseline data on bitcoin usage on information gathered in a survey done by Statista in Germany. There were 2,000 to 12,000 respondents from each of the 55 nations in the poll. In 2020, participants were asked if they owned or used digital assets.
The organization stated that its findings are important to pay attention to, but they should be interpreted with caution due to the limited sample size and unreliable data quality.