The RAND Corporation, a global policy thinktank, has released a report on the use of cryptocurrencies by terrorists, and has found that the practice isn’t as widespread as crypto bashers would like to believe. Mainstream media and the likes of Nouriel Roubini enjoy nothing more than telling the world that crypto is only used by terrorists and tax dodgers, but the RAND report states that “We see little current evidence of the adoption of cryptocurrencies by terrorist organizations or the motivation to do so…” This flies in the face of common narrative and reinforces that cash is still king when it comes to financing illegal activities, backing up a report from the DEA in September last year that said the exact same thing.
— RAND Corporation (@RANDCorporation) April 2, 2019
Easy to Get, Hard to Spend
RAND’s 99-page report looked at a number of areas within the sphere of cryptocurrency and terrorism but focused on three key areas – receipt, management, and spending. Receiving the funds is the easy part according to RAND, as large amounts can be sent quickly, cheaply and with privacy coins almost anonymously, to a central pool, but managing it and using it are the present stumbling blocks, according to the report:
Most terrorist groups are currently constrained in their ability to use cryptocurrency because of the limited acceptability and usability of these currencies in the regions in which terrorist groups operate. Even if a group receives and manages these funds, they cannot easily be used to pay for expenses where vendors and members expect cash, either in stable currencies like dollars and euros, or in local currencies.
Adoption Holding Back Adoption
In essence, the very thing that crypto fans are calling for, mass adoption, is a key factor holding back its attractiveness to terrorist organizations over alternative forms of funding. The report also states that even the most private coins currently on the market don’t offer enough privacy for terrorist groups, which is unsurprising considering they are competing with physical cash, which obviously has no blockchain whatsoever. RAND suggests that this could change in time, but even if the perfect token came out tomorrow the same issues facing adoption among the mainstream will exist for terrorists – volatility and acceptance.