Crypto, Corruption, and Capital Controls: Cross-Country Correlations

Crypto, Corruption, and Capital Controls: Cross-Country Correlations
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Volume/Issue: Volume 2022 Issue 060
Publication date: March 2022
ISBN: 9798400206214
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Topics covered in this book

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Exports and Imports , Economics- Macroeconomics , Economics / General , cypto-assets , cryptocurrency , corruption , capital controls , crypto-asset usage , Pairwise correlation , data limitation , capital control , crypto-asset adoption , capital openness , Capital controls , Virtual currencies , Corruption , Global

Summary

Empirical investigation of the factors underlying the growing usage of crypto-assets is in its infancy, owing to data limitations. In this paper, we present a simple cross-country analysis drawing on recently released survey-based data. We explore the correlation of crypto-asset usage with indicators of corruption, capital controls, a history of high inflation, and other factors. We find that crypto-asset usage is significantly and positively associated with higher perception of corruption and more intensive capital controls. Notwithstanding the data limitations, the results support the case for regulating crypto-assets, including know-your-customer approaches, as opposed to taking a laissez-faire stance.