Topics In Demand
Notification
New

No notification found.

Tackling Money Laundering by Implementing Blockchain
Tackling Money Laundering by Implementing Blockchain

July 20, 2023

14

0

We all know that cryptocurrencies are intangible digital currencies generated, verified, and recorded by a decentralised system using cryptography. The very idea of no ownership, where it is not owned or governed by a central authority, makes cryptocurrencies more prone to criminal activities including money laundering. The transactions made using public key cannot be directly linked to any individual or organization so cryptocurrencies are the most sought-after payment method due to their anonymity.

Blockchain to the Rescue

The same characteristics of Blockchain are being used to countermeasure the problem of money laundering.

The fact that Blockchain uses a decentralized network where connected nodes are required to validate any changes, makes it secure, provided that no one has gained control over 51% or more of the nodes. Each node has a copy of the entire ledger, making use of this immutable ledger to compare any changes in the records and thus detecting any unsolicited entry.

Introducing the KYC model, having a recorded ledger with verified IDs associated with each transaction, will curb the problem of money laundering as such a ledger would provide solid evidence in a court of law about the person or the company's act to launder money.

One can follow the Japanese model of licensing wallets and accounts. One can easily trace back to the originator of such transactions if they were issued a license or something of that sort, thus curtailing the chances of laundering acts.

While the development of a full proof solution that helps anti-money laundering is still very far, Blockchain technology does have the potential to succeed. Several startups and other companies are focusing on solving such issues. Work of companies like Evernym, for example, is already helping out with the problem of ID verification which is going to play a part in the prevention of money laundering.

One thing is clear - Blockchain offers a chance to put an end to issues like this or at least reduce it significantly. Let’s hope that Blockchain succeeds where others have failed. 

Enhance your understanding of blockchain technology by enrolling in blockchain courses available on FutureSkills Prime - India’s Technology Skilling Hub.


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


A skilling ecosystem focused on emerging technologies, powered by a partnership between the Ministry of Electronics and Information Technology, Government of India, nasscom, and the IT industry. It seeks to propel India to become a global hub of talent in emerging technologies.

© Copyright nasscom. All Rights Reserved.