Countries need to ramp up controls on cryptocurrency transactions to meet international standards on transparency, the Financial Action Task Force (FATF) said on Thursday.

The Paris-based watchdog said countries had made only “limited progress” in implementing its “travel rule”, which it had recommended for global adoption in 2015.

Under the rule, regulators are supposed to ensure that cryptocurrency firms verify the identities of people involved in transactions — similar to the rules that govern regular banks.

The standard is seen as a way to minimise the risk of cryptocurrencies being used for money laundering or terrorism financing.

During March this year, the FATF surveyed 98 jurisdictions and found that only 29 had passed travel rule legislation and only 11 had started to enforce it.

The report said the gap in the rules left cryptoassets and crypto firms “vulnerable to misuse, and demonstrates the urgent need for jurisdictions to accelerate implementation and enforcement”.

Cryptocurrencies are largely unregulated and the value of the major ones tends to fluctuate wildly.

In recent months, the value has plummeted, with as much as two-thirds of the market value of the sector being wiped out.

Enthusiasts regard cryptocurrencies and the technology around them as the foundation of a decentralised alternative to the mainstream banking system and argue against any regulation.

But national authorities are increasingly leaning towards stiffer rules and consumer protection, as crypto firms push into the mainstream with high-profile TV advertising and celebrity endorsements.