IMF linked the speed of cryptocurrency adoption to the level of corruption

The number of cryptocurrency users increases because of the problems with transferring money outside the state, the authors of an IMF report believe

11.04.2022 - 14:20

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What’s new? The International Monetary Fund (IMF) has published a report entitled “Crypto, Corruption, and Capital Controls: Cross-Country Correlations.” It states that residents of countries with higher levels of corruption are more likely to use cryptocurrencies than residents of other countries.

The IMF’s report

Where did the data come from? The IMF used data from the company Statista dated 2020, which surveyed between 2000 and 12 000 respondents in 55 countries. For the study, the IMF used the indicator of those who owned or used cryptocurrencies. “The 2021 geography of cryptocurrency report” by Chainalysis was used as an additional source.

What does the report say? The survey showed that these countries have strict restrictions on the movement of capital, making it difficult to move money outside the state, so the number of cryptocurrency users increases even more. Based on the findings, the report’s authors reported that stricter international regulation of cryptocurrencies is needed, in particular, KYC (“Know Your Customer”) requirements that provide for the identification of crypto exchange customers to prevent fraud and money laundering.

The report’s authors noted that, given the high level of inflation, cryptocurrency may be more stable than local currency in terms of value in the long term.

What had happened before? In March, the Cambridge Center for Alternative Finance (CCAF) jointly with the IMF launched a research initiative aimed at deepening understanding of the rapidly growing digital asset industry. The project called the Cambridge Digital Assets Programme (CDAP) is a public-private collaboration with 16 companies.

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