GLOBAL GOVERNANCE AND TECHNOLOGICAL DISRUPTION: ADDRESSING MONEY LAUNDERING AND TERRORISM FINANCING IN A DIGITAL AGE

Abstract

This study explores the evolving challenges and responses associated with money laundering (ML) and terrorism financing (TF) in the context of technological disruption and global governance. It examines the transformation of anti-money laundering and counter-terrorism financing (AML/CFT) regimes under the influence of emerging financial technologies, such as digital currencies, distributed ledger technologies (DLT), and virtual assets. Through a qualitative review of legal instruments, policy guidelines, and scholarly literature, the paper analyzes how criminals exploit technological advancements and regulatory gaps to obscure illicit financial flows. It also investigates the limitations of existing international legal frameworks, particularly about harmonization, enforcement, and risk-based compliance strategies. Findings highlight that while developed countries are advancing with RegTech solutions and digital regulatory tools, developing countries face infrastructural and legislative constraints that hinder AML/CFT implementation. The study also reveals that financial globalization and digital decentralization exacerbate challenges for cross-border cooperation and oversight. Drawing on transparency-stability and systems theory, the research underscores the importance of multilevel governance, legal harmonization, and proactive technological adaptation. The paper concludes by recommending stronger global coordination, enhanced public–private partnerships, and the integration of innovative regulatory tools to strengthen AML/CFT resilience in an increasingly digital financial ecosystem.