Key facts:
The body calls for stricter international regulation for the cryptocurrency industry.
It ensures that residents of developed countries use less bitcoin and other crypto assets.
“We found that the use of crypto assets is significantly and positively associated with higher perceptions of corruption and more intensive capital controls.” This is stated by the International Monetary Fund (IMF) in a report in which it analyzes the results of a survey of 110,000 people on the use of bitcoin (BTC) and other cryptocurrencies.
Surprisingly, the study focused on how digital assets can be used in corrupt countries, and not on the progressive increase in their use as a cover against the high rate of corruption.
With the idea of determining what is behind the popularity of bitcoin and other cryptocurrencies, the IMF surveyed thousands of people in 55 countries. And later in his report “Crypto, Corruption, and Capital Controls: Cross-Country Correlations,” determined that one of the key aspects is that, in countries with strict capital restrictions, the number of cryptocurrency users is increasing.
Meanwhile, “residents of countries in which the traditional financial sector is well developed may have less need for cryptocurrencies,” the agency points out in the document.
Then he adds that the personal data protection offered by the bitcoin network makes it a potential resource to hide illicit financial flowss, including proceeds from corruption.
Let us remember that in the bitcoin network it is possible for two parties to exchange their crypto assets without the intervention of a third party and without both revealing their personal information. Especially because, when talking about the first of the cryptocurrencies, users participate in the network by concealing their true identity. This happens under a pseudonym that is nothing more than the set of random numbers and letters that make up your public address.
However, the protection of the privacy offered by bitcoin is not something that many governments have agreed with, institutions and private companies that have been combining efforts to de-anonymize transactions.
Precisely, the IMF joins this cause by arguing that Stricter international regulation is required for the cryptocurrency industry. With this, he asks that the surveillance that companies such as Chainalysis, Blockseer, CipherTrace and Elliptic, among others, already carry out in the bitcoin network.
His idea is to deepen the analysis of blockchains to track information that is publicly available. They are methods used by governments and their security agencies to maintain surveillance in the ecosystem.
Stepping up surveillance on the bitcoin blockchain means it will increase control over users with the Financial Action Task Force’s (FATF) “travel rule.”
This regulation requires exchanges and other service providers in the cryptocurrency industry to exchange personal customer data if the transaction amount exceeds $1,000. This measure is also about to be implemented in the European Union with a new regulation that Parliament is evaluating.
Bitcoin, the lifeline for everyone, including the United States
The IMF, an organization based on the fiat system, seems to be very dedicated to what happens in the cryptocurrency ecosystem, to the point that it concentrates on determining how they are used to mask illicit money. However, it detracts from inflation, a word that is increasingly present in the community that revolves around bitcoin and other cryptocurrencies.
As CriptoNoticias recently reported, the word inflation was very present at the Bitcoin Conference event held last week in Miami. There, the co-founder of the cryptocurrency bank Galaxy Digital, Mike Novogratz said that bitcoin should be a right so that people can store the fruit of their labor.
Meanwhile, Ricardo Salinas, the third richest man in Mexico, is hopeful of seeing the world bitcoinized, with all protecting themselves from inflation and taking refuge in the pioneering cryptocurrency.
But beyond that, Matthew Pines, author of a 59-page paper for the Bitcoin Policy Institute, presented an analysis of the challenges facing the dollar and opportunities presented by the pioneer of cryptocurrencies. For him, it is more than evident that the current petrodollar reserve monetary system is wearing thin. “This system worked for a while, but it no longer serves our interests,” he says.
Then, he states that “it is in our national interest [en Estados Unidos] It is strategic to seriously consider how bitcoin can play a key role in an alternative model that helps preserve our global position and counter the evil plans of our adversaries.”
Pines stresses that the current dollar system is becoming a threat to the economic security of the United States and warns that this runs counter to the typical refrain that focuses on it is possible to print the world reserve currency, as much as possible, and receive real goods and services in return. It sounds like a good deal, but it’s not exactly.
However, from their point of view, China has already figured out how to turn that system around, so in order to weaken it, it buys our real estate, stocks, and farmland with those dollars.
Therefore, we have exchanged ownership of our hard and productive assets with China in exchange for consumable and perishable goods. This doesn’t exactly put the US in a great position from which to project force in a period of great power competition.
Matthew Pines, in the report for the Bitcoin Policy Institute
Pines assures that bitcoin can change this and can help the United States “not simply fight rearguard actions to preserve its status in the inherited global order.”
Instead, the US can use “non-traditional approaches that give us an asymmetric advantage, applying strategies that our adversaries have not anticipated, that put them on the defensive, forced to respond to our initiative.”
“Bitcoin could help reinvigorate our national economy, regain strategic initiative, and reinforce the global rules-based international order on which the prosperity of our citizens is assured,” says Pines.
In that sense, in the document, Pines invites the United States Treasury to divest itself of the dollar as a store of value asset, “which is not the same as abandoning the dollar, because this way will continue to be a means of exchange and a unit of account.” Therefore, what he does believe is that it will be important to “recognize the unsustainability of the current system and explore alternatives that preserve our position in the world economic order.”
Adversaries are trying to change the international monetary order, says Pines, and are positioning themselves for what comes next. Therefore, bitcoinAs minimum, must act as a backup assetin case the United States needs to print too much due to a confrontational crisis.
He argues that the United States has a clear advantage given that such a large amount of bitcoin is held by US residents, “so we will benefit disproportionately from its monetization.”