Bitcoin isn’t just a potential big-money investment; it also serves as a monetary safe haven in countries with oppressive financial systems. A study co-authored by two NEOMA researchers, Gabriel A. Giménez Roche and Antoine Noël, investigates how economic and political factors shape the take-up of bitcoin and trading on loosely regulated platforms.

Cryptocurrencies such as bitcoin are often seen as speculative assets: in other words, investments – in this instance digital – that are purchased in the hope of making a quick return but whose value swings unpredictably. Investing in “cryptos” also carries its own risks, since their value can plummet just as quickly.

This is a simplistic view of bitcoin, however. In some parts of the world where local currencies are crumbling and governments are enforcing strict capital controls, bitcoin acts as an alternative to these restrictions. Why are some countries taking up bitcoin more widely than others? What are the drivers? The joint NEOMA study examines how key factors such as governance, capital restrictions and economic freedom impact the trading volumes of this cryptocurrency.

DEXs: the other face of bitcoin

There are two kinds of platforms for transferring cryptocurrencies: centralised exchanges (CEXs) and decentralised exchanges (DEXs). CEXs, such as Binance or Coinbase, are company-run trading platforms where bitcoins can be exchanged for traditional currencies under government oversight.

DEXs, such as LocalBitcoins and Paxful, operate without the involvement of a central intermediary. These platforms allow users to trade bitcoins peer-to-peer via blockchain-based smart contracts. There are fewer controls, which equates to more freedom. The researchers focused primarily on this type of platform

An alternative solution in crisis-hit countries

Monetary freedom refers to the ability to spend, invest or transfer money without undue government interference. The study reveals that higher monetary freedom in a country correlates with reduced bitcoin activity on DEXs. This is the case, for example, in the United States and Germany, where local currencies are stable and the financial systems are robust.

By contrast, in countries where monetary freedom is low, where inflation is skyrocketing, the currency is depreciating and political instability is high, the volume of bitcoin trading on DEXs rises. This is the scenario in Venezuela, Turkey, Ukraine and other countries. In these contexts, bitcoin is emerging as a monetary refuge: shielded from the volatility of local currencies, it is used to safeguard wealth and maintain purchasing power.

All the same, the study shows that tight controls on the purchase of foreign assets drives down the volume of bitcoin transactions. Why should this be? Because in these scenarios, the exchange platforms may become inaccessible, and controls may stymie the purchase of bitcoins. To take one example: the Chinese government imposes limits on buying goods or making investments in other countries. Its goal is to prevent capital flight and to protect the domestic economy. In short, it is harder for a Chinese citizen to acquire property or invest outside the country.

Russia, on the other hand, places restrictions on the sale of Russian assets to foreign entities. These measures are often taken to prevent excessive capital leaving the country. Except that, in this case, the restrictions spark an increase in bitcoin trading on decentralised exchanges, enabling Russian citizens to find a way around their country’s repressive economic policies.

The role of regulators and policymakers

In the quest to control the “Wild West” of decentralised bitcoin exchanges, outright bans on cryptoassets do not work – this is one of the crucial points highlighted by the researchers. Nigeria provides proof of the pudding. Despite the cryptocurrency ban introduced by the Central Bank in 2017, Nigeria today ranks as one of the world’s largest bitcoin markets, with elevated trading volumes on decentralised platforms. This case illustrates that heavy-handed bans can backfire, pushing users towards alternative solutions with fewer controls.

Consequently, the researchers recommend that governments adopt more measured regulatory frameworks, promoting innovation while simultaneously safeguarding financial stability. It is vital to implement regulations tailored to the specific socio-economic conditions of each country, particularly in contexts where institutions are weak. This approach would encourage the responsible use of cryptocurrencies and would protect their economic opportunities.

Find out more

Gabriel A. Giménez Roche, Antoine Noël, Loïc Sauce, Bitcoin trade volume in decentralized markets, International Evidence, Technological Forecasting and Social Change, Volume 214, 2025, 124054, ISSN 0040-1625, https://doi.org/10.1016/j.techfore.2025.124054