NEW YORK (BLOOMBERG) - Cryptocurrencies are more popular in countries perceived as corrupt or with strict capital controls, boosting the case for greater regulation of the industry, the International Monetary Fund (IMF) said in a recent report.
The report shows why countries might want to require intermediaries, such as digital currency exchanges, to implement know-your-customer procedures - ID verification standards that are designed to prevent fraud, money laundering and terrorism financing, the organisation said.
Some countries, like the United States, have already instituted those kinds of controls. Nations around the world are struggling over the best way to regulate the US$2 trillion (S$2.72 trillion) crypto market, with the level of oversight varying greatly from one country to another.
The findings suggest that crypto assets "may be used to transfer corruption proceeds or circumvent capital controls", the organisation said, without singling out individual countries.
The IMF said it drew its baseline data on cryptocurrency usage from information collected in a survey conducted by the German company Statista. The survey covered 55 countries, with 2,000 to 12,000 respondents from each.
Participants were asked whether they owned or used digital assets in 2020. The organisation said its results are worth paying attention to, but also said they should be interpreted with caution, given the small sample size and uncertain quality of the data.