Bank for International Settlements warns: Offline digital euro could become a new tool for money laundering, with higher crime risks than cash

March 5 News: The Bank for International Settlements (BIS) latest research report indicates that offline transaction capabilities in central bank digital currency (CBDC) design may pose higher risks of financial crime. Researchers Andrea Minto, Anneke Kosse, Shirakami Takeshi, and Peter Wierts state in the report that compared to online payments or bank deposit payments, offline digital euro transactions face more complex challenges in anti-money laundering (AML) and counter-terrorism financing (CFT) regulation.

The report points out that offline CBDC transactions completed without internet connection, such as peer-to-peer payments via near-field communication (NFC) or Bluetooth technology, may reduce the likelihood of real-time transaction monitoring. Without a comprehensive compliance framework, such payment methods could be exploited by criminals to transfer funds or evade financial regulations in certain cases.

The researchers emphasize that, under the same conditions, the AML/CFT risks associated with offline digital euro payments may be higher than those of online digital euro transactions, and also higher than payments made through commercial bank deposit accounts or custodial crypto wallets. This means that as retail CBDC is promoted, regulators need to establish more detailed risk management mechanisms for different usage scenarios.

Meanwhile, the legislative process for the European Central Bank’s digital currency is accelerating. In early 2026, European Parliament members officially supported the launch of a digital euro capable of both online and offline payments. Many European consumers have expressed a desire for digital currency to be usable offline like cash, to meet privacy and offline payment needs.

The EU also plans to implement a cash transaction cap policy in 2027, limiting single cash payments to under 10,000 euros to strengthen AML regulation. However, European legislative bodies have not yet decided whether the digital euro will have similar transaction limits. The BIS report notes that due to the inconvenience of carrying and transporting cash, some illegal fund transfers may increasingly favor offline digital euro in the future.

Globally, the policy paths for CBDCs are diverging significantly. The EU is accelerating its CBDC project to maintain a leading position in digital payments and to address challenges posed by the rapid growth of USD stablecoins. Meanwhile, the United States has taken a more cautious stance on CBDCs. Former President Trump publicly opposed issuing a digital dollar and signed an executive order banning the launch of CBDC within the U.S. This week, some U.S. lawmakers introduced a bipartisan bill to restrict the Federal Reserve from issuing a CBDC before 2030.