Far from the opinion of cryptocurrency critics, it has been revealed that more fiat is used in money laundering than crypto ever has been. This fact was unearthed in the data from Chainalysis and the United Nations Office on Drugs and Crime.

Money laundering has been one of the points used by crypto critics to give the technology a negative colouration. The anonymous nature of transactions when cryptocurrencies are involved has led many into thinking that it will be a useful tool in the hands of criminals.

How Does the Government see Crypto?

Just recently, the U.S. Treasury Secretary Steven Mnuchin claimed that Bitcoin and other cryptocurrencies are being exploited by criminals. He acknowledged the action by criminals who use cryptocurrencies as a threat to national security. Here is what he said:

“Cryptocurrencies such as Bitcoin have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking. Many players have attempted to use cryptocurrencies to fund their malignant behavior. This is indeed a national security issue.”

While this statement may appear correct at first glance, available statistics reveals that financial crimes enabled by crypto pale in comparison by those enabled by fiat. The ratio between the fiat:crypto money laundering statistics, at the time of writing is a staggering 800:1. Meaning that for every $1 of BTC spent on the darkweb, $800 is laundered.

What is the Popular Currency Among Criminals?

The above ratio was published by Messari as the result of a research conducted after the statement by Mnuchin. This result by Messari coincides with Europols stand that traditional cash remains the dominant transaction instrument used by criminals.

Europol’s report stated that the money laundering schemes detected are largely characterized by cash movements, rather than any form of virtual currency.

“Although not all use of cash is criminal, all criminals use cash at some stage in the money laundering process… While the world is looking with concern at the possible misuse of virtual currencies by criminals, this report may seem somewhat unusual in that it is not highlighting a new phenomenon or an emerging risk… Money laundering schemes detected by law enforcement are still largely characterized by traditional techniques, in particular, the use of cash.”

The assertions by Messari and Europol go on to reveal that fiat is used in money laundering 800 times more than crypto. And in more contrast to Mnuchun’s opinion, fighting money laundering and financial related crimes is proving more productive when crypto is involved.

Recently, the Chinese police was able to crackdown on a Ponzi scheme, Plustoken, that involved investors losing about $3 billion. The crackdown was possible by tracing transactions on the blockchain. This would have been more difficult had fiat, especially cash, been the mode of transaction.

Is Cryptocurrency Safe for Transactions?

Cryptocurrency transactions are immutable and traceable. Once a transaction is confirmed on the blockchain, nobody can ever change the records. Unlike with its fiat counterpart, where anybody who has control of the backend can delete, manipulate or mutilate records. Even worse is the possibility of using cash, making transactions untraceable right from the beginning.

Realising this usefulness of cryptocurrencies could go a long way towards its mainstream adoption. This will be an addition to the efforts that platforms like tap are already making towards ensuring easy availability and use of cryptocurrencies.

We have recently opened our doors to crypto enthusiasts who are interested in testing the alpha platform and card services. While the card services are only available to residents of the EU, anyone can make use of the app by signing up on our website.

Knowing that cryptocurrencies provide for more safety, and less criminal implication, will definitely improve the confidence of users. Apparently, the barrier between the emerging cryptocurrency technology and its mainstream adoption have a lot to do with proper knowledge and understanding of the system. This is where the authorities need to take more responsibility and adopt an open-minded approach towards innovations.

The tap implementation which forms a bridge between the emerging world of crypto and traditional fiat systems is a perfect implementation. Knowing that fiat is used in money laundering more than crypto, this system will provide accountability in the monetary system. It will also promote transaction legitimacy and reduce fraud.