Cryptocurrencies and Global Governance: the Evolving International Regulatory System

• In Event: Digital Technologies and Organized Crime

Abstract

The purpose of this paper is to analyse the role and place of cryptocurrencies, blockchain technologies and DeFi within contemporary organized crime and multilateral policy trends. Global finance is undergoing a period of great technological disruption. This is driven by decentralization, changes in payment processing and a potential radically new role for central banks. Perhaps the most visible disruption is the emergence of blockchain technologies, which have facilitated the promise of decentralized finance (DeFi) and the proliferation of legion cryptocurrencies and virtual asset classes. To indicate the potential scale of impact of these changes, the payments processing industry currently generates $1.5tn USD in annual revenue, with projections it could rise to $3tn by 2030. Moreover, with roughly two billion people worldwide unbanked, including half of sub-Saharan Africa, financial innovations bring the tantalizing prospect of enabling more people to gain access to mainstream finance. With innovation and change in the financial sector, however, comes risk, particularly for enabling crime, money laundering, terrorist financing and the emergence of financial market systemic risk. The paper examines the emerging international regimes to govern this policy space, utilising a mixture of regime theory and policy analysis.

Author

• John Collins, Global Initiative against Transnational Organized Crime