Countermeasures against CBDC Financial Crimes

Abstract

The traditional currency cross-border circulation model has many problems in terms of efficiency, cost, and security.The private digital currencies represented by Bitcoin and Ethereum are flourishing and occupying an increasingly important position in cross-border payments.However, digital currencies themselves face great uncertainty and affect the stable operation of the global monetary system.In response, countries have started to develop CBDCs to enhance their financial inclusion and international competitiveness of their currencies with the advantages of digital currencies.However, the birth of new technologies often creates new problems, and CBDCs face a trade-off between privacy and transparency in their design, which can directly affect the supervision of CBDC funds and lead to CBDCs becoming a tool for financial crimes.This paper introduces the background and dynamics of CBDC development and the challenges it faces and combines existing relevant research and literature to propose countermeasures against CBDC financial crimes from several aspects: big data, artificial intelligence, and new regulation.Finally, future research directions in this field are proposed.