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Financial Crime Risks of Secrecy Jurisdiction Central Bank Digital Coins
Sultan, Shahzad
Sultan, Shahzad
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33.232-2025.22a Shahzad Sultan.pdf
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Description
A Master of Business Administration (MBA) by Shahzad Sultan entitled, “Financial Crime Risks of Secrecy Jurisdiction Central Bank Digital Coins”, submitted in December 2025. Thesis advisor is Dr. Kimberley Gleason. Soft copy is available (Thesis, Approval Signatures, Completion Certificate, and AUS Archives Consent Form).
Abstract
Central Bank Digital Currencies are becoming central to global monetary innovation, yet limited research has examined privacy enhancing designs introduced within secrecy jurisdictions. The Republic of the Marshall Islands’ Sovereign presents a distinctive case, a state-issued digital currency proposed with stronger privacy features than those adopted in mainstream Central Bank Digital Currencies. This thesis analyzes how such a design shapes financial crime risks, with particular attention to fraud, money laundering vulnerabilities, and regulatory capacity constraints. Using a qualitative casestudy approach, the research synthesizes document analysis, global Central Bank Digital Currencies comparisons, and insights from interviews with specialists in digital assets, Anti-Money Laundering and Combating the Financing of Terrorism, blockchain engineering, and financial regulation. Findings indicate that the Marshall Islands’ Sovereign coin amplifies each element of the Fraud Diamond model pressure, opportunity, rationalization, and capability while introducing cross border laundering vectors similar to those seen in privacy coins and darknet-based payment channels. Experts consistently warned that, without embedded safeguards such as tiered identity, selective-disclosure cryptography, and strict on/off-ramp controls, a secrecy oriented Central Bank Digital Currency would be treated as a high-risk instrument by global financial institutions and could trigger correspondent banking de-risking. The study contributes to emerging Central Bank Digital Currency policy discussions by demonstrating how privacy and financial integrity objectives can be integrated through careful design, and outlines practical measures for jurisdictions considering privacy focused digital currencies.