Financial institutions, government still wary of crypto

Register now

WASHINGTON — Sharp divisions remain on the risk perceptions of cryptocurrency between government officials, financial institutions and cryptocurrency companies, according to a global survey released Tuesday.

Cryptocurrency professionals “appear significantly more confident than other sectors about the business use and inherent vulnerabilities of cryptocurrency,” according to the survey conducted by the Association of Certified Anti-Money Laundering Specialists and the Royal United Services Institute.

The gulf between different stakeholder groups in how they view crypto-related vulnerabilities has its own risks, the survey’s authors wrote.

“The potential downside to this is that the cryptocurrency industry may materially underestimate the types of threats posed,” the report said. “On the other hand, other sectors may be overestimating how exposed cryptocurrencies are to different criminal activities.”

The survey was conducted with 566 people across the world and broken down by categories including financial institutions, government officials and the cryptocurrency industry. Of those surveyed, about 49% reported working in financial institutions, followed by 24% in government and 10% in the cryptocurrency field.

The differences in perspectives across different categories run deep and wide. While about 58% of the survey’s respondents said they believed the main use of cryptocurrency for most customers today was “investment and speculation,” nearly a third — 29% — believed that the main use was for “illicit purposes.”

When broken down by industry, the disparity in risk perception is stark: Among financial institutions and government, 35% and 26% of respondents, respectively, believed the primary use of cryptocurrency was for illicit transactions. Among cryptocurrency professionals, just 2% said the same.

Cryptocurrency firms’ respondents also reported being less concerned about the risk of specific types of crime being enabled by crypto products. While more than 80% of the survey’s respondents reported being concerned about the use of cryptocurrency for money laundering, for example, only 57% of crypto professionals were. The crypto industry appears most concerned about the potential for their products to be used to avoid international sanctions.

Asked broadly whether the use of cryptocurrency represented more of a risk or opportunity for firms, 55% of the survey’s respondents said they believed the technology constitutes a risk, and only 26% viewed it as an opportunity. Among financial institutions, 63% believed using cryptocurrency was a risk, compared with 56% of government personnel and 9% of respondents at cryptocurrency firms.

More than half of the survey’s respondents, or 51%, believed that cryptocurrency exchanges are “unprepared to deal with” cybercrime, versus 17% of cryptocurrency professionals.

By contrast, 83% of crypto respondents believed that cryptocurrency transactions “offer more transparency than traditional financial transactions.” But only 27% of the survey as a whole agreed. The figure was notably lower for respondents from both financial institutions and government: just 20% for both.

There was one notable area of general agreement: 56% of the survey’s respondents reported looking to government regulators for best practices around cryptocurrency, including 63% of respondents from the crypto community and 54% of financial institution respondents.

But the survey also illustrated the influence of nongovernment organizations focused on cryptocurrency policy, such as trade associations. Among the survey as a whole, 78% said they used guidance from nongovernment entities to guide best practices, including 78% of financial institutions and 80% of banks.

For reprint and licensing requests for this article, click here.
Cryptocurrencies Bitcoin AML Fraud Blockchain Compliance
MORE FROM AMERICAN BANKER