Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 62484
Money Laundering and Governance in Cryptocurrencies: The Double-Edged Sword of Blockchain Technology

Authors: Jiaqi Yan, Yani Shi

Abstract:

With the growing popularity of bitcoin transactions, criminals have exploited the bitcoin like cryptocurrencies, and cybercriminals such as money laundering have thrived. Unlike traditional currencies, the Internet-based virtual currencies can be used anonymously via the blockchain technology underpinning. In this paper, we analyze the double-edged sword features of blockchain technology in the context of money laundering. In particular, the traceability feature of blockchain-based system facilitates a level of governance, while the decentralization feature of blockchain-based system may bring governing difficulties. Based on the analysis, we propose guidelines for policy makers in governing blockchain-based cryptocurrency systems.

Keywords: Traceability, Money Laundering, Decentralization, Cryptocurrency, Blockchain

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