BIS report: Capital flow management measures seem largely ineffective in cryptocurrency trading

The Bank for International Settlements (BIS) recently released a paper titled "Empirical Analysis of Cross border Bitcoin, Ethereum, and stablecoin Flows," which delves into the driving factors behind cross-border cryptocurrency flows in 184 countries from 2017 to mid-2024. Research has found that geographic distance and language barriers have a much smaller impact on cryptocurrency trading than on traditional financial flows. Global factors such as intensified market volatility and widening credit spreads have become important determinants of native cryptocurrency assets. The correlation between stablecoins and remittance costs and transaction demands is stronger, especially in emerging markets and developing economies where traditional financial channels are costly. In addition, capital flow management measures seem to be largely ineffective in suppressing these digital transactions, with evidence indicating that the trading volume of certain cryptocurrency assets has even increased due to the implementation of these measures. The research findings highlight the dual role of cryptocurrency as a speculative investment and trading tool, emphasizing the need for further research to evaluate its impact on financial inclusion and economic stability.