The reasons would be diverse, including the barriers that regulators are imposing on the cryptocurrency sector, especially on exchanges.
According to this report, cryptocurrencies could be useful to terrorists only for receiving funding, but not for management of finances or their use.
The problem lies in the possibility of spending cryptocurrencies, especially in the case of significant figures: for example, in the case of the collection of large sums in cryptocurrencies, these are difficult to manage and to spend anonymously.
In fact, RAND analysts have found little evidence of the adoption of cryptocurrencies by terrorist organisations, although they admit that this could change in the future due to possible new technological innovations.
In other words, at the moment, cryptocurrencies do not offer sufficient guarantees of anonymity, which are necessary for criminal organisations, in which case the traditional banknotes would still be unbeatable.
Terrorism, cash and privacy coins
This also applies to high privacy cryptocurrencies such as Monero, because it is still difficult to spend. Often, in fact, it is still necessary to change crypto into fiat to be able to buy most goods or services, and this change is difficult to make anonymously.
The report also considers the use of cryptocurrencies on the dark web but defines “unlikely” the purchase of weapons through this method. It would be more likely to convert cryptocurrencies into fiat money, disguising it as a legitimate activity using money laundering techniques, and then use the cash more comfortably to make purchases in the traditional way.
Moreover, many crypto exchanges are now subject to anti-money laundering (AML) regulations, so it may be particularly difficult to use them to launder large sums of money.
As such, no particular interest of terrorist organisations in cryptocurrencies has emerged to date.
On the contrary, according to the report, at the moment, the use of cryptocurrencies for the financing of terrorist activities is more likely to help the government than the terrorists themselves. For this reason, cash money is still the most widely used for these purposes.