Why Banks don’t trust Cryptos


A new survey has shown that though many crypto exchanges affirm their commitment to warding off criminals who aim to launder money and fund terrorist activities, governments and banks do not seem convinced.

READ: Africans lead in the fight against crypto fraud

Methodology

  • The survey was distributed to ACAMS members, members of RUSI’s Centre for Financial Crime and Security Studies’ mailing list, as well as to individual government and cryptocurrency stakeholders for distribution.
  • This report is based on 566 individual responses, received between 3rd June 2020 and 22nd July 2020. Survey respondents indicated they are located in North America (32%), South America (8%), Europe (23%), Asia (22%), Africa (7%), Middle East (5%), and Oceania (3%).
  • Almost all respondents (97%) are familiar with at least one type of cryptocurrency, with Bitcoin being the most recognized (96%). The least recognized cryptocurrency was Zcash (24%).

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The Cryptocurrency Risk & Compliance Survey, produced in alliance by the British think tank RUSI and the industry body ACAMS, revealed vital insights into how financial institutions, policymakers view cryptos.

  • 88% of financial institutions are worried about cryptocurrencies being used for money laundering purposes, against 57% of those who specialize in digital currencies.
  • 89% of governments are concerned about crypto being used on the dark web, while just 50% of crypto industry respondents felt the same.
  • 23% of government respondents see the likes of Bitcoin as an opportunity, compared with  80% of the crypto industry.
  • 20% of financial institutions agree that crypto transactions offer greater levels of transparency, while 83% of digital asset specialists believe this to be the case.
  • 9% of financial institutions say exchanges are prepared to deal with cybercrime, but 48% of respondents from the crypto industry say they are.

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These statistics summarize two things: the Crypto industry still needs to convince the regulators and audience about the effectiveness of crypto and reduced risk of holding digital, and most importantly, it needs to win the trust of the government.

Although the recently released report revealed that cybercriminals represent 1% of all crypto-transactions; indicating that the threat isn’t as sizeable as some may think, it’s still true that digital assets have appeal among terrorist organizations and money launderers, with the likes of Monero growing particularly popular among the seedy merchants found in darknet markets.

READ: Cryptos having better technology than Bitcoin


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Overall, the cryptocurrency industry is much more confident in cryptocurrency service providers’ tools and preparedness, than other sectors are.

Half of the respondents (51%) believe that crypto exchanges are unprepared to deal with the aforementioned cybercrime activities, although respondents from the cryptocurrency industry are significantly more confident in their own preparedness.

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Future of Cryptocurrency

Respondents are more likely to agree than disagree that in five years, crypto-currency will be an effective tool for financial inclusion.

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  • The crypto-currency industry overwhelmingly agrees (81%) with this statement, echoing their views on the current role of crypto-currency in financial inclusion.
  • Respondents still believe that the main use of cryptocurrency in five years will be investments and speculations, but day-to-day payments rank second, with illicit purposes moved to third.
  • The crypto-currency industry specifically said that day-to-day payments will become the main use of crypto-currency.

READ: 3 Crypto exchanges control about 14.3% circulating BTC supply

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This article was originally published on Nairametrics
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