A new survey has shown that financial institutions and governments still view cryptocurrencies as a gray area. According to these groups, criminal activity remains the primary concern over the growing crypto assets industry.
The survey conducted by the Royal United Services Institute (RUSI) and ACAMS focuses on 566 responses from across the financial and cryptocurrency industries, government. As per the survey, members of the crypto sector exudes more confidence against industry risks than outsiders such as governments and financial institutions.
About 88% of governments and members of the financial sector believe that crypto-assets are used overwhelmingly in criminal activities. Their top concerns were illicit crypto use for money laundering and purchases in the dark web.
However, just 50% of respondents in the crypto space believed that crypto’s main use lies in illicit fund transfers. For industry insiders, escaping from sanctions is the most prominent current risk associated with the digital asset class.
Respondents from the financial sector also highlighted the need for exchanges to do more to tackle cyber-crime. Moreover, only 20% of respondents from this group agree that crypto transactions offer greater transparency levels.
The Crypto Industry Needs to Win Over Outsiders
This survey highlights the cryptocurrency sector’s need to convince financial regulators about the reduced risk of using digital assets. Moreover, industry insiders need to win government regulators’ trust by demonstrating crypto’s effectiveness over the current financial system.
Although the crypto industry is confident in digital asset service providers’ tools and preparedness, outsiders still hold on to prevailing perceptions about the sector.
Chainalysis released a report showing that only a small percentage of crypto transactions were linked to crime in the past year. This important finding indicates that the threat of crypt-related illicit activity isn’t as sizable as some may think.
Even so, trust in digital assets remains extremely low institutionally, with many still under the erroneous impression that crypto’s primary use lies in illicit fund transfers.
The opposing views between governments and the cryptocurrency industry over digital assets’ risks threaten to hinder growth in this nascent industry. Narrowing the gap between the two parties is crucial to fostering crypto adoption.
Kayla Eisenman, a research analyst at the Center for Money and Security Crime, believes that the key to bringing more trust to crypto is through regulation. He explained that adopting a clear consensus on internal regulatory procedures in the cryptocurrency space would likely shut the door to illegal activities.
The Future of Cryptocurrencies
The survey also asked respondents about the future of digital assets. Professionals in the cryptocurrency sector believe that investment and speculation will be the primary use of crypto in the next five years.
Similarly, respondents from other sectors were also more likely to agree than disagree that crypto will be a useful tool for financial inclusion in five years.
It is now clear that the crypto sector has an opportunity to build trust with governments and financial institutions. This way, more parties will warm up to the industry and view the digital asset class as an opportunity rather than a risk.