The percentage of institutional entities that have virtual money in their wallets is growing, the Polish Economic Institute (PIE) points out. Classic cryptocurrencies, incl. the first and most popular bitcoin, do not have any form of security with other assets. For several years, however, there have also been stablecoins, i.e. cryptocurrencies secured by fiduciary currencies issued by central banks. The most popular stablecoin is Tether.

PIE cites research conducted since 2018 by the Cambridge Center for Alternative Finance, which shows that in recent years there has been a gradual "financialization of cryptocurrencies", increasing security standards, and an increase in the number of identified cryptocurrency holders. 

"In Q3 2020, 191 million accounts were registered by 101 million people, and in 2018 the number of cryptocurrency holders was estimated at 35 million," PIE indicated.

Analysts agree that the anonymous and non-systemic nature of cryptocurrencies makes virtual money eagerly used by criminals. They also point out that in recent years more and more companies offering cryptocurrency brokerage – virtual asset service providers (VASP) – have been certified in terms of preventing money laundering, and thus also identifying their customers. It's about the know your customer principle – the so-called KYC.

"Most of the cryptocurrency holders are private individuals, but the percentage of institutional entities is growing and varies from 10-30 percent depending on the region of the world," analysts note. 

They add that institutional entities are both the so-called cryptocurrency mines, as well as traditional financial institutions: hedge funds, Venture Capital funds, as well as banks.

(PAP)