Bitcoin as cash in terms of the european anti-money laundering directive

Carolin Kaiser

Research output: Contribution to journalArticleAcademic


The European Anti-Money Laundering Directive 2015/849 sets out detailed rules for the prevention of money laundering and terrorist financing. It presents a clear framework for financial institutions, covering both cash and electronic payments systems. However, the directive fails to regulate digital currencies, such as bitcoin, leaving a large lacuna in the directive. Financial institutions specializing in digital currencies are thus left to their own devices with little information about how best to address the obligations set forth in directive 2015/849. In this paper, the author will propose the application of the rules on cash to digital currencies. As digital currencies are limited to the digital sphere and operate in a closed environment, they are often mistakenly compared to e-money, but the way digital currencies operate is in fact very close to how cash is used today. Digital currencies are obtained through online exchanges, just as cash is usually obtained from an (automatic) bank teller. Cash and digital currencies are both typically exchanged between individuals without interference of a third party. Finally, there is no entity who can be obliged to track the movement of cash or digital currencies between individuals, except if a payment is exceptionally large. However, unlike anonymous cash, there exists a ledger of all transactions carried out in digital currencies, which can be used by financial intelligence units directly to track suspicious movements. Therefore, it can be argued that the application of the rules on cash could facilitate a smooth incorporation of digital currencies into the existing framework.
Original languageEnglish
Pages (from-to)23-36
JournalIanus: Diritto e Finanza
Volume13 bis
Publication statusPublished - 1-Oct-2016

Cite this