A recent study conducted by the International Monetary Fund has revealed that countries with elevated levels of corruption are more likely to see higher cryptocurrency adoption.
The report, entitled “Crypto, Corruption, and Capital Controls: Cross-Country Correlations,” is based off of a Global Consumer Survey conducted by Statista in 2020. The survey included somewhere between 2,000-12,000 respondents per country, from over 53 countries around the world.
The study also cited data from various other sources, but warned of their “methodological drawbacks.” Furthermore, it said that the IMF study requires careful interpretation of the results, provided the small sample size and unreliable data components.
After conducting the empirical investigation, the IMF found that countries with a higher degree of corruption and stringent capital controls tend to have a larger share of crypto adoption, which indicated that cryptocurrencies may have been used to transfer corruption proceeds or avoid capital restrictions.
The report, furthermore, calls for tighter regulation of crypto assets, such as requiring crypto intermediaries to enact anti-money laundering and know-your-customer rules to prevent illicit financing. Meanwhile, IMF did not separate any individual country in its findings.
The International Monetary Fund has regularly called for stricter oversight of cryptocurrencies, citing inadequate consumer protection measures, cryptocurrency anonymity, country-specific regulations, and stablecoin as some of the risk factors posed by the nascent industry.