Mechanisms of Terrorism Financing in the Digital Age: Between Traditional Channels and Cryptocurrencies
Purpose: The aim of this article is to examine how digital transformation is reshaping the mechanisms of terrorist financing, with particular emphasis on the relationship between traditional financial channels and cryptocurrencies. The study investigates whether digital instruments are replacing established methods or becoming integrated into hybrid financing models. Design/Methodology/Approach: The study adopts a qualitative, comparative and systemic approach based on a critical analysis of academic literature, reports by international institutions and private-sector analyses. The research methods include literature analysis, desk research, analysis of online sources and case study analysis. Particular attention is given to Bitcoin, Monero, informal value transfer systems and the interaction between formal, informal and digital financial channels. Findings: The findings indicate that digital transformation does not replace traditional terrorist financing mechanisms but rather facilitates their integration with digital instruments. Cryptocurrencies play a complementary role, particularly in online fundraising, micropayments and cross-border transfers. Their significance lies primarily in their operational flexibility and potential to complicate financial monitoring rather than in their overall share of terrorist financing. Hybrid financing models increase organisational adaptability and create additional challenges for financial supervision and law enforcement. Practical Implications: The findings highlight the need to strengthen international cooperation, improve the monitoring of digital financial flows and develop analytical capabilities integrating financial intelligence, network analysis and artificial intelligence. Regulatory approaches should address the interaction between traditional financial systems, cryptocurrencies and informal value transfer mechanisms. Originality/Value: The article contributes to the interdisciplinary discussion on terrorist financing by analysing traditional and digital channels as interconnected components of a single financial ecosystem. It emphasises the qualitative transformation of financing mechanisms and the growing importance of hybrid models in understanding the adaptability of terrorist organisations.