Asian Angle | Safer than cash? The real risks cryptocurrency poses to Southeast Asia
Crypto’s champions argue the technology offers unmatched transparency and security. But a closer look at the numbers tells a different story
He made a powerful comparison: only 0.15 per cent of crypto volume is linked to illicit activity, which he said was 30 times less than the 5 per cent rate found in the traditional banking sector. But the reality is quite different and underscores the need for stricter regulation of crypto assets.
Based on his claim, Zhao argued that global law enforcement should encourage greater use of cryptocurrency, on the grounds that “it’s more transparent and easier to track”. He is not alone. Others in the crypto industry echo these talking points, even framing government action against crypto-related crime as overzealous or misdirected.
Whether crypto transactions are genuinely safer than their traditional counterparts is a question with profound implications, particularly for Southeast Asia. The region is a hotbed of crypto enthusiasm, home to three of the world’s top 10 crypto-adopting nations. Policymakers here must balance two seemingly competing imperatives: capitalising on the opportunities of the digital economy while protecting their citizens from the risks posed by crypto assets.
A closer examination, however, reveals that the statistics used to contrast illicit activity in crypto and traditional finance rest on shaky foundations. Zhao’s cited rate of crypto misuse is calculated as a share of total crypto flows, while the 2-5 per cent figure for fiat currency refers to a share of the global economy, not total global payments.