The body requests stronger international regulation for the digital currency industry. It ensures that residents of advanced nations use less bitcoin and other digital currencies.
The International Monetary Fund expressed that cryptocurrencies get positively linked to higher perceptions of corrupted activities and more rigorous capital controls. The entity highlighted this information in a report in which it studies the results of a survey of 110,000 people on the use of bitcoin (BTC) and other digital assets.
Surprisingly, the study centered its efforts on how cryptocurrency can serve as a tool in corrupted nations and not on the progressive increase in their use as a cover against the high rate of corruption that affects many countries worldwide.
To determine what is behind the fame of bitcoin and other digital assets, the IMF surveyed thousands of people in 55 countries. And later, in his report Crypto, Corruption, and Capital Controls: Cross-Country Correlations, he determined that one of the crucial facts is that in nations with more substantial capital restrictions, the number of digital currencies users increases exponentially.
The agency points out in the document that citizens of nations in which the traditional financial sector is well developed may have less need for digital assets to boost their economic structure.
The entity also added that the personal data protection brought by the bitcoin platform makes it a vital resource for camouflaging illicit financial behaviors, including proceeds that come from corrupted activities.
Exchanges Without Any Intervention
In the bitcoin network, two parties can exchange their digital assets without the intervention of a third party and without revealing their data. When it comes to the first digital asset, users play a vital role in the network by concealing their true identities.
This situation happens under a pseudonym that is nothing more than the set of random numbers and letters that make up a public address.
However, the protection of privacy that bitcoin currently offers is not an action that many governments, institutions, and private entities have agreed with, mixing already combined efforts to de-anonymize trading operations.
The IMF joins this cause by arguing that stricter international regulation got needed for the digital asset industry. With this, he asks that the surveillance that entities like Chainalysis, Blockseer, CipherTrace, and Elliptic, among others, already carry out in the bitcoin network.
His idea is to deepen the analysis of blockchains to track the publicly available information. They are methods used by administrations and their security entities to keep surveillance alive and enabled in the ecosystem.
Stepping up surveillance on the bitcoin blockchain means it will expand its control over users with the Financial Action Task Force.
This regulation forces exchanges and other service providers in the cryptocurrency industry to exchange clients’ data if the amount of the transaction surpasses USD 1,000; this measure is also about to get executed in the European Union with a new regulation that Parliament has currently under study.
By: Jenson Nuñez
