The Bank for International Settlements published a BIS Bulletin on anti-money laundering (AML) compliance for cryptoassets, arguing that approaches built around “trusted intermediaries” have limited effectiveness on permissionless public blockchains where no single actor can be held accountable for record-keeping. The note explores an alternative model that uses the public blockchain transaction history to support AML and other compliance checks, including foreign exchange rules, by assessing the provenance of a particular unit or balance and applying safeguards when cryptoassets are converted into fiat currency at “off-ramps” that touch the banking system. The Bulletin notes that stablecoins have overtaken bitcoin as the preferred cryptoasset among criminals since 2022 and accounted for about 63% of illicit transactions in 2024, with estimated illicit crypto volumes reaching USD 51.3 billion. It describes how an “AML compliance score” could be constructed using UTXO-level traceability for bitcoin and wallet-level transaction linkages for account-based stablecoins, mapping exposures to “allow-listed” and “deny-listed” addresses and denying or permitting off-ramp transactions based on jurisdiction-set thresholds. It also sets out a spectrum of possible stringency, from requiring conversion only for tokens that have remained within KYC-verified allow-listed addresses to more permissive deny-list screening, with intermediate approaches using multiple behavioural criteria; the framework would also require clarity on where a “duty of care” sits (users, exchanges, stablecoin issuers, banks or other conversion infrastructure) and anticipates a role for third-party compliance service providers. The note argues that, given the cross-border use of stablecoins, jurisdiction-specific scoring criteria and greater international cooperation would improve regulatory outcomes, but it does not set out an implementation timetable.
Bank for International Settlements 2025-08-13
Bank for International Settlements bulletin sets out transaction history based AML compliance scoring for cryptoassets
The Bank for International Settlements published a BIS Bulletin proposing an alternative anti-money laundering model for cryptoassets that leverages public blockchain transaction histories and applies safeguards at fiat conversion “off-ramps,” rather than relying on “trusted intermediaries.” The note highlights that stablecoins are the dominant vehicle for illicit crypto activity, outlines how an “AML compliance score” could be constructed for bitcoin and stablecoins using allow- and deny-lists and varying stringency levels, and stresses the need to clarify duties of care and enhance cross-border regulatory cooperation.