The implications of national blockchain infrastructure for financial crime
| Date | 16 June 2023 |
| Pages | 236-248 |
| DOI | https://doi.org/10.1108/JFC-01-2023-0006 |
| Published date | 16 June 2023 |
| Author | Marcus Smith,Milind Tiwari |
The implications of national
blockchain infrastructure for
financial crime
Marcus Smith and Milind Tiwari
Australian Graduate School of Policing and Security, Charles Sturt University,
Canberra, Australia
Abstract
Purpose –This paper aims to explain the implications of the impending establishment of national
blockchain infrastructureby governments around the world, andhow these structures can be integrated with
existinglegislation and assist in the prevention of financial crime.
Design/methodology/approach –The methodologyused is a literature review and analysis of progress
being made to establishnational blockchain infrastructure.It provides a discussion of the connection between
blockchainand financial crime, and how this infrastructurewill interact with existing regulatory frameworks,
and particularly,financial crime legislation.
Findings –This paper documentsfinancial crime risks posed by digital currencies and smart contracts and
the role that national blockchaininfrastructure can potentially play in mitigatingthese risks. It highlights the
need for governments to devote resources to developing this infrastructure and associated regulatory
frameworks.
Originality/value –There are few, if any, academic papersin the financial crime, or wider literature, that
have examined the potential for national blockchain infrastructures prevent financial crime, including the
implicationsfor existing regulation in the field.
Keywords Regulation, Financial crime, Blockchain, Digital currencies,
National blockchain infrastructure, Smart contracts, Fraud
Paper type Conceptual paper
1. Introduction
Over the past 15 years, blockchain technology (also known as distributed ledger technology)
has advanced to a stage where it has become widely accepted as a secure means of transacting
over the internet. It is used in an increasing range of contexts and has established itself as an
important part of the global economy. A major evolution is underway around the world, as
governments seek to establish national blockchain infrastructure to support digital currencies
and smart contracts. These platforms will increase confidence among business and individuals,
providing the level of security necessary for blockchain to become the default option, even for
very large transactions, and reduce associated opportunities for financial crime (Dawes Centre
for Future Financial Crime, 2021).
The UK and the USA have already acknowledged that digital currencies and smart contracts
must be integrated into the broader financial system, while others are already implementingtheir
own national platforms, such as China (Munro, 2022). However, national blockchain
infrastructures raise regulatory issues relating to balancing data govern ance, privacy and
security, and integration with the existing financial system. Their establishment and effective
operation will be associated with complex technical and legal challenges for governments,
including the absence of developed policy frameworks, and integration with existing financial
legislation, interoperability with regulatory systems and enforceability of contracts.
JFC
31,2
236
Journalof Financial Crime
Vol.31 No. 2, 2024
pp. 236-248
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-01-2023-0006
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
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