Sweden: Central Bank Report Highlights Money Laundering Risks of Digital Currencies
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The Swedish Central Bank (Riksbanken) has published a report on its e-currency pilot project, emphasizing the need to address money laundering risks associated with digital currencies. The report suggests that the e-krona, Sweden’s proposed official digital currency, will be subject to the country’s anti-money laundering regulations.
Technical Solution
The report states that the e-krona will utilize distributed ledger technology (also known as blockchain technology) to support its operations. However, the bank notes that the technical solution for the e-krona must comply with existing money laundering regulations in Sweden.
Compliance Responsibilities
According to the report, financial institutions and other entities involved in the e-krona’s transactions will be responsible for ensuring compliance with anti-money laundering regulations. This includes:
- Conducting customer due diligence
- Monitoring transactions
- Reporting suspicious activities to the Financial Intelligence Unit
The Swedish Central Bank is working closely with Finansinspektionen, the country’s financial regulatory agency, to ensure that the e-krona complies with anti-money laundering regulations.
Working Group Established
The bank has established a working group to develop guidelines for implementing anti-money laundering measures in the e-krona system. This effort aims to ensure that the e-krona is designed and implemented with robust anti-money laundering safeguards.
Global Concerns
The report comes at a time when concerns about money laundering and terrorist financing are growing globally. In Sweden, there have been several cases of money laundering involving digital currencies, highlighting the need for robust regulations and supervision.
Expert Opinion
Experts commend the Swedish Central Bank’s approach to addressing money laundering risks as a positive step towards ensuring the integrity of the financial system. However, they also emphasize that more needs to be done to address the anonymity and lack of regulation in the digital currency market.
Timeline
The e-krona report is expected to be presented to the government by November 30, 2022, and will likely influence the development of Sweden’s anti-money laundering regulations and supervision framework.