The cryptocurrencies are more popular in countries perceived as corrupt or with strict capital controls, highlighting the need for more regulation of the industry, said the International Monetary Fund (IMF) in a recent report.
(See: These would be the consequences of not declaring cryptocurrencies in the country).
The report shows why countries might want to require intermediaries, such as digital currency exchange houses, that implement know-your-customer procedures, identity verification standards that are designed to prevent fraud, money laundering and terrorist financing, the organization said.
Some countries, such as the United States, have already instituted such controls.
Nations around the world are scrambling to find the best way to regulate the $2 trillion crypto market, and the level of oversight varies widely from country to country.
(See: Crypto salaries: the new way of paying salaries is a reality).
The findings suggest that crypto assets “can be used to transfer proceeds of corruption or circumvent capital controls“, the IMF said, without singling out individual countries.
The entity assured that it extracted its reference data on the use of cryptocurrencies from the information collected in a survey carried out by the German company Statistical.
The survey covered 55 countries, with between 2,000 and 12,000 respondents each. And participants were asked if they owned or used digital assets in 2020.
(See: Campaign launched to democratize the crypto world in Latin America).
The organization said their results are worth paying attention to, but also said they should be interpreted with caution given the small sample size and uncertain data quality.
BLOOMBERG
