The possible abuse of cryptocurrency as a form of terrorism financing is not a new concern, but new research suggests there is less need to worry about this at all.
US-based non-profit think tank RAND Corporation has published a new report on March 27, stating that crypto in its current form and operation is not an effective means of financing for terrorism.
“Current cryptocurrencies are not well matched with the totality of features that would be needed and desirable to terrorist groups but might be employed for selected financial activities,” RAND states.
Its report – named “Terrorist Use of Cryptocurrencies: Technical and Organizational Barriers and Future Threats” – lists various factors that make crypto unattractive for terrorists. This includes “uncertainty and infighting” amongst many cryptos as they develop, which could limit their wider adoption and therefore their viability for terrorists.
Multiple exchange thefts and fraud, increasing law enforcement in the industry, as well as whether government regulation of cryptos lead to less compatible or compliant ones being abandoned or marginalized also contribute to making crypto less attractive to terrorists.
However, should a single cryptocurrency come forth which leads to widespread adoption, greater anonymity, and improved security, while regulations remains lax or inconsistent, then RAND believes its potential for use by terrorists will pose significant threats.
Apart from darknet and black markets, more decentralized exchanges, and increase in complementary uses and products for crypto will also make crypto more alluring for terrorists.
Clear regulation with oversight of cryptocurrencies, however, along with international law enforcement and intelligence cooperation will keep crypto financing of terrorism at bay, writes RAND.