The National Bureau of Economic Research (NBER) has published a study that gives detailed information on Bitcoin transactions. According to the survey, only 3% of all Bitcoin transactions account for illegal activities, like frauds and gambling. Cryptocurrency exchanges and trade desks account for the highest share, comprising 80% of all Bitcoin transactions. The new survey reveals how earlier reports on the illegal use of Bitcoin overestimates the percentage. A study from 2019, for example, claimed that 46% of all Bitcoin transactions happen for illegal purposes. The new study from NBER takes into account broader parameters, and the results show a truer picture of the composition of Bitcoin transactions.
The NBER study is significant for various reasons. Firstly, the illegal use of cryptocurrency has been cited as one of the major reasons for governments to be imposing stringent regulations on crypto or banning it altogether. It also accounts for a lot of regulations imposed on crypto exchanges and helps suppress growth and developments in the space. With new data, that will be difficult for jurisdictions to achieve, and as a consequence, will boost growth in the crypto sector.
Terrorism financing is one of the biggest concerns behind cryptocurrencies. Apart from that, scams and gambling also happen over Bitcoin. While the percentage of the activities might be low, it does not negate their existence altogether. Governments and cryptocurrency exchanges need to work in tandem to counter the illegal use of Bitcoin and other privacy-focused cryptocurrencies.
