Cryptoassets have “unleashed a plethora of financial innovation that will likely revolutionise the form of money and the ways it is used,” a recently published International Monetary Fund report said, but the multilateral lender cautioned that, without regulation, cryptoassets may also facilitate illicit capital flows.
In an alliteratively titled working paper — Crypto, Corruption, and Capital Controls: Cross-Country Correlations — IMF researchers concluded that, based on crypto usage data drawn from Statista’s Global Consumer Survey, “cryptoasset usage is significantly and positively associated with corruption and capital controls.”
But the paper goes beyond identifying correlation to say that “that cryptoassets may be used to transfer corruption proceeds or circumvent capital controls” and calls on regulators to “bring empirical evidence to bear on the question of whether cryptoassets facilitate corruption.”
The researchers noted that cryptocurrencies are hardly unique in that respect, though, pointing out that the anonymity of cash, especially large denomination notes, is exploited for crime and tax evasion.
This article was originally published on blockworks.co