Terrorism Financing and Cryptocurrency: Implications for Financial Accountability, Security, and Sustainable Economic Practices

Abstract

This study examines the intersection of cryptocurrency, terrorism financing, and sustainable economic practice, highlighting impacts on financial accountability and global security.While cryptocurrencies offer financial inclusion and innovation, their pseudonymous and decentralized nature also facilitates illicit activities like terrorism financing.Using Financial Liberalization and Illicit Financial Flows theories, the research employs qualitative thematic analysis with 12 experts from regulatory, technical, law enforcement, and academic backgrounds.Findings reveal cryptocurrencies' dual potential for abuse and benefits such as low transaction fees.The study calls for effective global regulatory frameworks, enhanced public-private collaboration, and advanced tools like AI and blockchain analysis to manage risks.It advocates a balanced regulatory approach that promotes transparency and harnesses cryptocurrencies' benefits while ensuring security, recommending harmonized regulations, cooperative task forces, regulatory sandboxes, and mandatory compliance audits.