Survey on Crypto Indicates Concern of Illicit Usage but Everyone Believes Usage of Crypto as Form of Payments Will Increase in Coming Years

A new study by RUSI and ACAMS tackles the emerging digital assets or cryptoassets ecosystem. According to the survey results, the perception of affiliated risk regarding cryptoassets is mixed with governments and financial institutions seeing cryptocurrency as a significant source of risk. Meanwhile, crypto industry participants view crypto more as a source of opportunity confident in their ability to manage any intrinsic risk.

All surveyed groups believe the usage of crypto will increase over the next 5 years – most importantly as a form of day to day payments.

The RUSI-ACAMS Cryptocurrency Risk & Compliance Survey was conducted in collaboration with YouGov. The survey received 566 unique responses from across the financial and cryptocurrency industries, including crypto exchanges, financial regulators, and financial intelligence units. The report is described as “a very rare insight into both the challenges and opportunities in this emerging financial crime risk.

(89%) of respondents from the cryptocurrency industry agree that cryptocurrency can be an effective tool to secure financial inclusion. Of those agreeing, over half (59%) strongly agree with this statement.

Overall, both public officials and crypto industry participants view criminal activity as a top concern (70%).

These concerns can be categorized as follows:

  • money-laundering (84%)
  • used on the dark web (84%)
  • for procurement of illicit goods (83%)
  • used by sanctioned actors (82%),
  • used by terrorist organizations (79%)
  • to fund human trafficking (76%)
  • fraudulent initial coin offering (75%)

The crypto industry may be concerned about these nefarious activities but not to the point that they cannot be managed.

The cryptocurrency industry “largely believes that cryptocurrency transactions offer more transparency than traditional financial transactions and that transactions are compatible with sanctions screening and compliance, while financial institutions and government disagreed.”

Report co-author Kayla Izenman, Research Analyst with the Centre for Financial Crime and Security at RUSI commented:

“ The crypto industry appears to have a great amount of confidence in their own abilities to counter and detect risk, whereas [the] government doesn’t have nearly as much faith. Bridging this gap is essential, as all sectors agree that the use of cryptocurrency is on the rise, but we know there’s no clear consensus on domestic regulatory action. This risks opening the door to illicit activities.”

Rick Mcdonell, Executive Director of ACAMS and co-author of the survey added that:

“The results of this survey give a unique global insight into how respondents from governments, financial institutions and the crypto industry itself think about cryptocurrency: it’s potential and it’s risks. Their views are well worth noting as policy making and regulatory enforcement continue to take shape around the world.”

Data points of note include that 63% of banks and 56% of governments saw cryptocurrency as a risk, as opposed to only 9% of the cryptocurrency industry.

Asian financial institutions are more friendly towards cryptocurrency (42% indicated easier use than fiat currency) than North American and European financial institutions.

Responses from the cryptocurrrency industry overwhelmingly indicate that cryptocurrency should be considered legal tender (76%), while just under half (44%) of FI respondents agree that cryptocurrency should be legal tender, with governments even more cautious (37%).

All respondents anticipate more guidance and best practices from both governmental bodies and non-governmental organizations – most importantly is from FATF and national regulators.

Expectations are for an increased role for cryptocurrency in day-to-day payments in the future as well as a decrease in cryptocurrency use for illicit activities, by all respondents.

The report may be downloaded here.

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