Is Crypto Facilitating Corruption or Aiding Citizens to Get Away from It?

Recently, IMF published a report saying that crypto assets had brought a unique financial innovation to the financial sector. The report added that this innovation has the power to revolutionize how we think about money. However, IMF, a multilateral lender, warned that crypto assets might be facilitators of illegal capital flows if proper laws to govern them are not implemented.

IMF also gave an insight into the roles that a crypto asset can play to enhance transparency for government-related payments.

In the paper-working paper, researchers from IMF concluded that the adoption of Crypto was ominously used and associated with corruption and money controls. This research relied on statistics obtained from Global Consumer Survey. However, the paper further states that crypto-assets might facilitate the transfer of profits obtained through corruption.

The researchers found out that Crypto is barely exclusive in that respect. However, the research pointed out that the obscurity of money encouraged criminality and tax evasion.

Interpretation is Vital

The crypto adoption was evaluated using seven variables. However, the researchers identified corruption control alongside capital controls as the significant variables. The report stated that both variables were indistinguishable, considering their influence on the study data. Global Digital Asset and Cryptocurrency Association Chief Executive Officer Gabriella Kusz believes that the real-world enactment of capital control is a much more nuanced matter. She added that the existence of capital controls is not proof of their proper functionality. Gabriella Kusz believes that cryptocurrencies fundamentally operate outside the structures that aid fraudulent government administrators.

The Global Digital Asset and Cryptocurrency Association CEO adds that users are provided with a more secure way of protecting their investments.

Transparency is usually viewed as a remedy to corruption. Therefore, the report recommends that these technologies be used to enhance transparency and record-keeping for procurement and other government-related payments. The report’s authors believe that this will strengthen accountability, hence reducing the intensity of corruption.

IMF researchers categorically mentioned the possibility of CBDC offering extra flexibility, security, and accessibility at cheaper costs. They added that regulators should put more work and effort into these technologies to enable governments to enjoy the financial benefits they carry.

The research relied on surveys of about 2,000 to 12,000 citizens of 53 different nations. The authors insisted on the need of having better data adoption trends, given the shortcomings of previous studies and the absence of enough quality data.

The report’s authors said that the regulators should take urgent action and avoid waiting for conclusive evidence. However, the effectiveness benefits of a central bank’s digital currencies are only beneficial where there is no corruption. For an individual running away from a corrupt government, trying to preserve the worth of their investments, the censorship confrontation intrinsic to Crypto is vital.

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