IDEAS home Printed from https://ideas.repec.org/p/bis/bisblt/111.html
   My bibliography  Save this paper

An approach to anti-money laundering compliance for cryptoassets

Author

Listed:
  • Iñaki Aldasoro
  • Jon Frost
  • Sang Hyuk Lim
  • Fernando Perez-Cruz
  • Hyun Song Shin

Abstract

Existing anti-money laundering (AML) approaches relying on trusted intermediaries have limited effectiveness with decentralised record-keeping in permissionless public blockchains. The public transaction history on blockchains can enable AML and other compliance efforts, such as FX regulations, by leveraging the provenance and history of any particular unit or balance of a cryptoasset, including stablecoins. An AML compliance score based on the likelihood that a particular cryptoasset unit or balance is linked with illicit activity may be referenced at points of contact with the banking system ("off-ramps"), preventing inflows of the proceeds of illicit activity and supporting a culture of "duty of care" among crypto market participants.

Suggested Citation

  • Iñaki Aldasoro & Jon Frost & Sang Hyuk Lim & Fernando Perez-Cruz & Hyun Song Shin, 2025. "An approach to anti-money laundering compliance for cryptoassets," BIS Bulletins 111, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:111
    as

    Download full text from publisher

    File URL: https://www.bis.org/publ/bisbull111.pdf
    File Function: Full PDF document
    Download Restriction: no
    File URL: https://www.bis.org/publ/bisbull111.htm
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kocherlakota, Narayana R., 1998. "Money Is Memory," Journal of Economic Theory, Elsevier, vol. 81(2), pages 232-251, August.
    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. Berentsen, Aleksander & Huber, Samuel & Marchesiani, Alessandro, 2016. "The societal benefit of a financial transaction tax," European Economic Review, Elsevier, vol. 89(C), pages 303-323.
    2. Christie Smith & Aaron Kumar, 2018. "Crypto‐Currencies – An Introduction To Not‐So‐Funny Moneys," Journal of Economic Surveys, Wiley Blackwell, vol. 32(5), pages 1531-1559, December.
    3. Minzyuk, Larysa, 2010. "The development of non-monetary means of payment," MPRA Paper 28167, University Library of Munich, Germany, revised 2010.
    4. Martin, Fernando M., 2015. "Debt, inflation and central bank independence," European Economic Review, Elsevier, vol. 79(C), pages 129-150.
    5. 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.
    6. Guillaume Rocheteau & Pierre‐Olivier Weill, 2011. "Liquidity in Frictional Asset Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s2), pages 261-282, October.
    7. Kiyotaki, Nobuhiro & Lagos, Ricardo & Wright, Randall, 2016. "Introduction to the symposium issue on money and liquidity," Journal of Economic Theory, Elsevier, vol. 164(C), pages 1-9.
    8. Ritter Moritz, 2010. "The Optimum Quantity of Money Revisited: Distortionary Taxation in a Search Model of Money," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-26, June.
    9. Cameron Harwick, 2023. "Money’s mutation of the modern moral mind: The Simmel hypothesis and the cultural evolution of WEIRDness," Journal of Evolutionary Economics, Springer, vol. 33(5), pages 1571-1592, November.
    10. University of Notre Dame & Christopher Waller, 2008. "Dynamic Taxation, Private Information and Money," 2008 Meeting Papers 896, Society for Economic Dynamics.
    11. Berentsen, Aleksander & Monnet, Cyril, 2008. "Monetary policy in a channel system," Journal of Monetary Economics, Elsevier, vol. 55(6), pages 1067-1080, September.
    12. Janet Hua Jiang & Peter Norman & Daniela Puzzello & Bruno Sultanum & Randall Wright, 2024. "Is Money Essential? An Experimental Approach," Journal of Political Economy, University of Chicago Press, vol. 132(9), pages 2972-2998.
    13. Bigoni, Maria & Camera, Gabriele & Casari, Marco, 2020. "Money is more than memory," Journal of Monetary Economics, Elsevier, vol. 110(C), pages 99-115.
    14. Kim, Young Sik & Lee, Manjong, 2016. "Who should bear the resource cost of electronic transaction?," Journal of Macroeconomics, Elsevier, vol. 47(PB), pages 270-280.
    15. José Suárez-Lledó, "undated". "Monetary Policy with Heterogeneous Collateralized Borrowing," Working Papers 374, Barcelona School of Economics.
    16. Menner, Martin, 2007. "The role of search frictions for output and inflation dynamics: a Bayesian assessment," UC3M Working papers. Economics we076235, Universidad Carlos III de Madrid. Departamento de Economía.
    17. Aleksander Berentsen & Christopher Waller, 2005. "Optimal Stabilization Policy with Flexible Prices," CESifo Working Paper Series 1638, CESifo.
    18. Alessandro Marchesiani, 2022. "The Essentiality of Money in a Trading Post Economy with Random Matching," Working Papers 202223, University of Liverpool, Department of Economics.
    19. Alexei Deviatov & Neil Wallace, 2014. "Optimal inflation in a model of inside money," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(2), pages 287-293, April.
    20. Neil Wallace, 1997. "Absence-of-double-coincidence models of money: a progress report," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 21(Win), pages 2-20.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:bis:bisblt:111. 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: Martin Fessler (email available below). General contact details of provider: https://edirc.repec.org/data/bisssch.html .

    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.