A new IMF study shows crypto is more rampant in corrupt countries and recommended increased regulation of the crypto trade citing the use of digital assets in nations that are deemed corrupt or with a lot of financial restrictions as we can see further today in our crypto news.
Crypto among other things enables citizens to undermine government power by evading restrictions set by the government. It also encourages illicit activity by assisting the criminals in avoiding investigation. By eliminating the middlemen, crypto has the ability to brign havoc on the existing financial infrastructure and can undermine it. The IMF analysis also shows why countries could choose to compel the intermediaries like digital currency exchanges and can undertake KYC processes and other verification rules intended to combat fraud, money laundering, and terrorism financing. A few countries like the US already implemented similar measures according as the IMF study shows.
With the global crypto industry expected to surpass $4 trillion by 2026, plenty of countries moved faster to regulate it. With the rise of BTC and ETH creating a frenzy among investors, new schemes are being developed to perpetuate multiple forms of corruption and Ponzi schemes. According to the IMF, digital assets can be used to shift illicit funds or avoid capital prohibitions but the group made no specific mention of any countries.
The new IMF research disclosed that crypto assets could be used to transfer corruption proceeds or to avoid capital controls in 55 nations. The participants in the poll were questioned whether they used to hold crypto in 2020 reflecting to another study which the organization urged for a more consistent digital currency governance across the international boundaries. The IMF also stated that it derived the baseline data on BTC usage from information gathered in the study by Statista:
“The best strategy is not to fight but to figure out how to effectively regulate bitcoin. Residents of nations with a well-developed traditional banking sector may be less inclined to feel the need for cryptocurrency.”
The authors discovered plenty of reasons why one country’s virtual currency can be more popular than another’s because of inflation, popular crypto like BTC could be more stable than native one and the fact that poorer countries often have tighter capital controls, the measures that restrict the movement of foreign funds and out of the country’s economy, crypto can be used to avoid taxes and restrictions.
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