Crypto is Very Popular in Corrupt Countries, IMF Warns

"Residents of countries where the traditional financial sector is well developed may be less likely to feel the need for crypto," reads a new IMF report.

There's a reason so many of those "invest in the token that's going to revolutionize the X industry" scams often come from countries with shaky governance systems.

According to a new International Money Fund (IMF) report, cryptocurrency is much more popular in countries with insecure currencies and corrupt governments.

With the global cryptocurrency market expected to reach $2.2 billion by 2026, many governments are urgently moving to regulate the industry.

The rush is on to punish bad actors, with new scams using the excitement around the rise of bitcoin and ether to push through all sorts of fraud and Ponzi schemes.

But regulation can vary greatly from country to country. That makes it a lot easier to both use and abuse cryptocurrency in some parts of the world.

"Residents of countries where the traditional financial sector is well developed may be less likely to feel the need for crypto," the study's authors write without singling out any particular nation.

The IMF surveyed more than 110,000 respondents in over 55 countries, polling between 2,000 and 12,000 people in each country, about their cryptocurrency use. 

The report's authors found many reasons cryptocurrency may be more popular in one nation over another. 

As poorer nations also tend to have higher capital controls — measures that prevent the flow of foreign funds in and out of the country's economy  — cryptocurrency can also be a way to circumvent taxes and limits.

"A history of high inflation may make the domestic currency less attractive as a store of value," the study's authors write. "Past inflation is used as a proxy for the stability of the currency, which may affect the attractiveness of crypto assets as an alternative store of value."

These findings, of course, don't look great for countries that adopt cryptocurrency too enthusiastically, like El Salvador did last year.

The central American nation was the first country in the world to adopt bitcoin as legal tender and bought 150 bitcoin during a September 2021.














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