Crypto Capture of Foreign Aid
Summary
NBER Working Paper 35655 investigates whether foreign aid diversion into cryptocurrency occurred in developing countries. It uses a disbursement-timed forensic measure across $238 billion in World Bank aid (2018-2024) and finds 2-6 cents leakage per dollar, equating to roughly $1.7-4.4 billion. The study notes forensic traces in ledgers that could help detect and recover diverted funds.