The main objective of this paper is to study whether cryptocurrencies have the potential of becoming an off-the-record payment method and whether they are widely used for money laundering purposes. Furthermore, it also intends to analyse the relationship between the adoption of such innovative financial instruments and illicit activities in a predetermined sample of countries. Methods Used: In this report quantitative and qualitative analysis were combined. On the one hand, data from 12 different ...
The main objective of this paper is to study whether cryptocurrencies have the potential of becoming an off-the-record payment method and whether they are widely used for money laundering purposes. Furthermore, it also intends to analyse the relationship between the adoption of such innovative financial instruments and illicit activities in a predetermined sample of countries. Methods Used: In this report quantitative and qualitative analysis were combined. On the one hand, data from 12 different cryptocurrencies was collected to carry out a comparison between them and their characteristics. On the other hand, new characteristics and KPIs were analysed, this time to draw a comparison between cryptocurrencies and physical money. Finally, more data was collected of a sample of 72 countries. All this data was used to conduct a statistical regression with the program R to find correlation between the variables, and see what patterns they may show.
Findings and Conclusions: After analysing the above mentioned correlations and variables, it was concluded that indeed some characteristics of cryptocurrencies enable money laundering (and the use of dirty money), such as decentralisation, stability and return. Furthermore, cryptocurrencies were also found more favourable in terms of criminality for its portability and digital nature. Finally, when each sample country’s jurisdiction was analysed it was found that, even though each country has its particularities, it should
be understood that cryptocurrencies are becoming more and more common, and that the general public is accessing them with more frequency. Policymakers ought to be careful, and take them into account when updating policies that include topics such as bribery, corruption, etc.
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