The U.K. government’s economic and finance ministry has released a new policy document stating that cryptocurrencies like bitcoin pose a “low risk” for terrorist financing.
According to the HM Treasury paper, the country’s National Crime Agency (NCA) also deemed that the risks of digital currency use in money laundering are “relatively low.” However, it went on to claim that cryptocurrencies are used to “launder low amounts at high volume.”
The paper comes two years after a similar statement was made in another terrorism financing threat analysis report by the Treasury department. That report took a similar stance, and suggested that, if the use of digital currencies become more widespread in the country, the “risk could rise.”
The latest report also expects the money laundering risks associated with digital currencies to grow in correlation with the increase in the technology’s adoption as a payment method.
The report reads:
“As the number of businesses accepting digital currency payments grows, there is an increasing risk of criminals using the currencies to launder funds without needing to cash out into non-digital, or ‘fiat’ currencies.”
In terms of terrorist financing, the use of digital currencies is assessed to be “unlikely” to increase in the next five years, the paper states.
The paper further cited the peer-to-peer lending industry, which it said has the potential to be used as a “terrorist financing tool,” though no incidences have been observed in the U.K. to date.
The full “National Risk Assessment 2017” report can be found here.
HM Treasury image via Shutterstock
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Source: The Global Blockchain