The Digital Euro: Possible Anti-Money Laundering Implications in The Belgium Banking System

The history of money spans from 9000 BC to today. In this period money has shifted from exchange of physical goods, to exchange of coins, and now digital currency as a means of payment. The newest example – central bank digital currencies (CBDCs) is considered in this study. The current research focuses on discovering the main changes to the anti-money laundering (AML) process in the Belgian banking sector after the Digital Euro is introduced. The study employs the use of qualitative methods such as an adapted case study and semi-structured interviews using content analysis with AML experts working in the banking sector of Belgium. According to the respondents, the Digital Euro will provide enough (know-your-customer) KYC information for an investigation to be made, the EUid will give additional protection against money laundering (ML), over-reporting of cases to the financial intelligence units (FIUs) will go down, compliance costs will become lower, and the Digital Euro will be fully adapted in the payment medium market in 10 years. The limitations are limiting the research only to Belgium and the banking industry, as well as having the focus only on the AML field. Other limitations are executing research dependent on only AML experts with a limited size. On the managerial side of implications, the actors that the Digital Euro will affect the most are the FIUs, banks and users and they need to adapt accordingly. This thesis recommends more research to be done in other ML cases, countries and how the digital euro will change the AML process there. For the CBDC topic – the digital euro and its currency profile, payment between two CBDCs, and legal tender between different CBDCs. Finally, this research builds over studies that have concerned themselves with CBDCs in the context of AML.