The digitalisation of the financial instruments: Its effectiveness on the AML legislation

Abstract

Over the past few years, the digital transformation has made progress in leaps and bounds, especially thanks to the digitalisation of the financial instruments. Cryptocurrencies, distributed ledgers technology’s infrastructures and the new payment services are examples of innovations that were born and that benefit from this development. Nevertheless, this has led to the necessity of a legislation review, given the novelty of the subject matter and the increased loopholes created by law breakers, particularly in the money laundering and counter-terrorism areas. This dissertation therefore discusses how legislators are approaching these innovations and how they are trying to regulate them. After a general overview of the background, it examines the impact of digitalisation on the anti-money laundering legislation, with an emphasis on the concrete changes that have taken place and on the challenges that legislators are still facing to fully cover the subject. The conclusion that we expect to reach, though, is that despite the efforts of the regulators to strengthen the legislative framework, there will always be a possibility of a breach due to the continuous evolution of the financial instruments.