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Criminal use of cryptocurrencies: a great new threat or is cash still king?

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  • Simon Butler

Abstract

In July 2018, the Federal Reserve Chairman told the US Congress that cryptocurrencies are ‘great’ for money laundering. Many media headlines follow comments such as this, suggesting that cryptocurrencies are a significant criminal tool that should be feared. This article examines academic research, particularly those that analysed the Bitcoin blockchain, to see if the results matched the headlines. This was then compared to wider government and think-tank reporting. Contrary to popular opinion, this article shows that cryptocurrencies are currently used in a very small percentage of crime and they are not the great future threat that many assert. Cash is the real enemy for crime fighting and remains ‘king’. It is anonymous and far more useful to criminals than cryptocurrencies. However, the future of money is uncertain and policymakers need to understand that there is more to the debate about cryptocurrencies than the headlines suggest.

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  • Simon Butler, 2019. "Criminal use of cryptocurrencies: a great new threat or is cash still king?," Journal of Cyber Policy, Taylor & Francis Journals, vol. 4(3), pages 326-345, September.
    • Handle: RePEc:taf:rcybxx:v:4:y:2019:i:3:p:326-345
    DOI: 10.1080/23738871.2019.1680720
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    References listed on IDEAS

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    1. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
    2. Apolline Blandin & Ann Sofie Cloots & Hatim Hussain & Michel Rauchs & Rasheed Saleuddin & Jason Grant Allen & Katherine Cloud & Bryan Zheng Zhang, 2019. "Global Cryptoasset Regulatory Landscape Study," Cambridge Centre for Alternative Finance Reports -201904-gcrls, Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge.
    3. Sean Foley & Jonathan R Karlsen & Tālis J Putniņš, 2019. "Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?," Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1798-1853.
    4. Eguren Martin, Fernando & Mukhopadhyay, Mayukh & van Hombeeck, Carlos, 2017. "The global role of the US dollar and its consequences," Bank of England Quarterly Bulletin, Bank of England, vol. 57(4), pages 13-33.
    5. Fish, Tom & Whymark , Roy, 2015. "How has cash usage evolved in recent decades? What might drive demand in the future?," Bank of England Quarterly Bulletin, Bank of England, vol. 55(3), pages 216-227.
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    Cited by:

    1. David Sanz-Bas & Carlos del Rosal & Sergio Luis Náñez Alonso & Miguel Ángel Echarte Fernández, 2021. "Cryptocurrencies and Fraudulent Transactions: Risks, Practices, and Legislation for Their Prevention in Europe and Spain," Laws, MDPI, vol. 10(3), pages 1-20, July.

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