Kuang Li
Title: AML/CFT Governance Gaps in El Salvador's Bitcoin Policy (2021-2023). A Document Assessment
Supervisor: Dr. Egert Juuse
Opponent: Dr. Vasilis Kostakis
Defense: 21 January 2026
Abstract: The legalization of Bitcoin in El Salvador formed an experiment in the monetary policy of high visibility with cross-border financial integrity implications. This thesis assesses the way the governance of the anti-money laundering and counter-terrorist financing (AML/CFT) was both designed and operationalised based on the 2021-2023 policy cycle. The study methodology is a qualitative policy-analytical case study, which involves structured document analysis of legal tools, institutional requirements, supervisory and chosen public-facing working texts. As the benchmark, FATF Recommendations and the FATF risk-based approach to virtual assets and virtual asset service providers are applied and realized in the form of a coding and assessment matrix, which connects the evidence with governance indicators. Three clusters of governance gaps have been identified in the analysis. First, a virtual-asset ecosystem with multiple actors does not always have specific regulatory perimeter and role allocation, making it weaker in accountability. Second, the lack of operational detail with regard to the expectations on licensing or registration, inspection authority and access to data limits the supervisory and enforcement capacity, which diminishes the credibility of risk-based supervision. Third, operational controls and auditability is asymmetric, especially on customer due diligence, suspicious transaction reporting channels, sanctions screening and record retention. The thesis ends with the staged suggestions on enhancing legal clarity, inter-institutional coordination and system auditability and maintaining policy space to innovate.
Keywords: AML/CFT; FATF; Bitcoin Law; virtual assets; regulatory governance.
