IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v12y2025i1d10.1057_s41599-025-05047-9.html
   My bibliography  Save this article

The impact of anti-money laundering measures on remittance costs: moderating role of frontier technology

Author

Listed:
  • Swapnilsingh Yuwrajsingh Thakur

    (Symbiosis International University
    Symbiosis Centre For Management Studies)

  • Prashant Dev Yadav

    (Symbiosis International University
    Symbiosis Centre For Management Studies)

  • Yatin Sharad Mankame

    (Symbiosis International University
    Symbiosis Centre For Management Studies)

  • Rishi Manrai

    (Amity University
    Amity Business School)

Abstract

Central banks are increasingly experimenting with frontier technologies, such as Central Bank Digital Currencies (CBDC) and Distributed Ledger Technology (DLT) platforms, alongside advancements in traditional systems like the SWIFT network. While prior research has largely examined technology readiness and regulatory frameworks in isolation, their interactive effects on remittance costs remain underexplored. This study investigates how the Frontier Technology Readiness Index (FTRI) moderates the relationship between remittance costs and the Anti-Money Laundering (AML) Index. The lack of integration of these dimensions is a critical research gap that is addressed to help achieve Sustainable Development Goal 10c (SDG-10c) and G20 targets. Panel data regression, followed by fixed and random effects to test robustness, was employed using datasets for remittance-sending and remittance-receiving countries derived from Worldwide Remittance Price data. In remittance-sending countries, enhanced technological readiness combined with a less stringent AML framework is associated with lower remittance costs. On the contrary, despite high technological readiness, in remittance-receiving countries, higher AML stringency tends to increase costs. Technology and AML measures in receiving countries and the amount of remittance paid in sending countries, in isolation, don’t have a significant influence on the cost of remittances. The analysis focuses solely on remittance cost efficiency and proposes incorporating transfer speed and transparency in future studies. Findings imply that the prevalence of informal channels like hawala and current pricing models does not encourage and reward higher remittance volume. Remittance cost reduction policies should focus on anti-money laundering measures and technology readiness in conjunction rather than in isolation. Incorporating national indexes provides a clear direction for improving the defined set of variables that are measurable and thus actionable to policymakers.

Suggested Citation

  • Swapnilsingh Yuwrajsingh Thakur & Prashant Dev Yadav & Yatin Sharad Mankame & Rishi Manrai, 2025. "The impact of anti-money laundering measures on remittance costs: moderating role of frontier technology," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    • Handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05047-9
    DOI: 10.1057/s41599-025-05047-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-025-05047-9
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-025-05047-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Xie, Tao & Xu, Ye & Li, Yu, 2024. "Nonlinear relationship between natural resources and economic growth: The role of frontier technology," Resources Policy, Elsevier, vol. 90(C).
    2. Seng, Kimty, 2021. "The mobile money’s poverty-reducing promise: Evidence from Cambodia," World Development Perspectives, Elsevier, vol. 22(C).
    3. Masahina Sarabdeen & Manal Elhaj & Hind Alofaysan, 2024. "Do Digital Adaptation, Energy Transition, Export Diversification, and Income Inequality Accelerate towards Load Capacity Factors across the Globe?," Energies, MDPI, vol. 17(16), pages 1-18, August.
    4. Lim, Sokchea & Morshed, A.K.M. Mahbub & Turnovsky, Stephen J., 2023. "Endogenous labor migration and remittances: Macroeconomic and welfare consequences," Journal of Development Economics, Elsevier, vol. 163(C).
    5. Freund, Caroline & Spatafora, Nikola, 2008. "Remittances, transaction costs, and informality," Journal of Development Economics, Elsevier, vol. 86(2), pages 356-366, June.
    6. Sean Foley & Jonathan R Karlsen & Tālis J Putniņš, 2019. "Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed through Cryptocurrencies?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1798-1853.
    7. Shastri, Shruti, 2022. "The impact of infectious diseases on remittances inflows to India," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 83-95.
    8. Hector Perez-Saiz & Ms. Longmei Zhang, 2023. "Renminbi Usage in Cross-Border Payments: Regional Patterns and the Role of Swaps Lines and Offshore Clearing Banks," IMF Working Papers 2023/077, International Monetary Fund.
    9. Brian D Feinstein & Kevin Werbach, 2021. "The Impact of Cryptocurrency Regulation on Trading Markets," Journal of Financial Regulation, Oxford University Press, vol. 7(1), pages 48-99.
    10. Gousia Habib & Sparsh Sharma & Sara Ibrahim & Imtiaz Ahmad & Shaima Qureshi & Malik Ishfaq, 2022. "Blockchain Technology: Benefits, Challenges, Applications, and Integration of Blockchain Technology with Cloud Computing," Future Internet, MDPI, vol. 14(11), pages 1-22, November.
    11. Stanley Munamato Mbiva & Fabio Mathias Correa, 2024. "Machine Learning to Enhance the Detection of Terrorist Financing and Suspicious Transactions in Migrant Remittances," JRFM, MDPI, vol. 17(5), pages 1-19, April.
    12. Ahmed, Farhana & Dzator, Janet & Acheampong, Alex O., 2023. "Do remittances reduce school dropout in Bangladesh? The role of government’s administrative and structural support," Journal of Policy Modeling, Elsevier, vol. 45(2), pages 388-404.
    13. Kpodar, Kangni & Amir Imam, Patrick, 2024. "How do transaction costs influence remittances?," World Development, Elsevier, vol. 177(C).
    14. Barkat, Karim & Alsamara, Mouyad & Mimouni, Karim, 2023. "Can remittances alleviate energy poverty in developing countries? New evidence from panel data," Energy Economics, Elsevier, vol. 119(C).
    15. Khurrum S. Mughal & Muhammad Farooq Arby & Sakkhi Babar & Saddam Ilyas & Friedrich Schneider, 2023. "Estimates and economic analysis of informal remittances for Pakistan," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 28(1), pages 199-215, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gnangnon, Sèna Kimm, 2023. "Effect of Economic Uncertainty on Remittances Flows from Developed Countries," EconStor Preprints 279480, ZBW - Leibniz Information Centre for Economics.
    2. Cornelia Pop & Ingrid-Emanuela Colonescu, 2021. "Cryptocurrencies’ Puzzle," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
    3. Daehan Kim & Mehmet Huseyin Bilgin & Doojin Ryu, 2021. "Are suspicious activity reporting requirements for cryptocurrency exchanges effective?," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-17, December.
    4. Raphael Auer & Marc Farag & Ulf Lewrick & Lovrenc Orazem & Markus Zoss, 2022. "Banking in the shadow of Bitcoin? The institutional adoption of cryptocurrencies," BIS Working Papers 1013, Bank for International Settlements.
    5. Sèna Kimm Gnangnon, 2024. "The effect of economic uncertainty on remittance flows from developed countries," Economic Affairs, Wiley Blackwell, vol. 44(2), pages 267-280, June.
    6. Ryan Chahrour & Rosen Valchev, 2024. "The Dollar in an Era of International Retrenchment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 72(3), pages 1042-1080, September.
    7. Christian Hubert Ebeke, 2011. "Does the dual-citizenship recognition determine the level and the utilization of international remittances? Cross-Country Evidence," CERDI Working papers halshs-00559528, HAL.
    8. Hanna Halaburda & Guillaume Haeringer & Joshua Gans & Neil Gandal, 2022. "The Microeconomics of Cryptocurrencies," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 971-1013, September.
    9. Goodell, John W. & Goutte, Stephane, 2021. "Co-movement of COVID-19 and Bitcoin: Evidence from wavelet coherence analysis," Finance Research Letters, Elsevier, vol. 38(C).
    10. Marco Lambrecht & Andis Sofianos & Yilong Xu, 2025. "Does Mining Fuel Bubbles? An Experimental Study on Cryptocurrency Markets," Management Science, INFORMS, vol. 71(3), pages 1865-1888, March.
    11. Koray Caliskan, 2022. "The Elephant in the Dark: A New Framework for Cryptocurrency Taxation and Exchange Platform Regulation in the US," JRFM, MDPI, vol. 15(3), pages 1-18, March.
    12. Junaid Ahmed & Mazhar Mughal & Inmaculada Martínez‐Zarzoso, 2021. "Sending money home: Transaction cost and remittances to developing countries," The World Economy, Wiley Blackwell, vol. 44(8), pages 2433-2459, August.
    13. Li, Xuelin & Yang, Lin, 2023. "Natural resources, remittances and carbon emissions: A Dutch Disease perspective with remittances for South Asia," Resources Policy, Elsevier, vol. 85(PB).
    14. Binh Nguyen Quang & Thai‐Ha Le & Canh Nguyen Phuc, 2022. "Influences of uncertainty on the returns and liquidity of cryptocurrencies: Evidence from a portfolio approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2497-2513, April.
    15. Anil Donmez & Alexander Karaivanov, 2022. "Transaction fee economics in the Ethereum blockchain," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 265-292, January.
    16. Gnangnon, Sèna Kimm, 2023. "Duration of membership in the world trade organization and investment-oriented remittances inflows," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 258-277.
    17. Naqbi, Shaikha Ali Al & Nobanee, Haitham & Ellili, Nejla Ould Daoud, 2025. "Global trends and insights into cryptocurrency-related financial crime," Research in International Business and Finance, Elsevier, vol. 75(C).
    18. Erdogan Kaygin & Yunus Zengin & Ethem Topcuoglu & Serdal Ozkes, 2021. "The Evaluation of Block Chain Technology within the Scope of Ripple and Banking Activities," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 10(3), pages 153-167.
    19. Barkat, Karim & Mimouni, Karim & Alsamara, Mouyad & Mrabet, Zouhair, 2024. "Achieving the sustainable development goals in developing countries: The role of remittances and the mediating effect of financial inclusion," International Review of Economics & Finance, Elsevier, vol. 95(C).
    20. Raphael Auer, 2019. "Beyond the doomsday economics of "proof-of-work" in cryptocurrencies," BIS Working Papers 765, Bank for International Settlements.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05047-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.