The US presidential administration sees cryptocurrencies as a tool to circumvent sanctions. The United States imposed so far more than 9,000 sanctions against legal entities and individuals from countries such as Iran, Russia and North Korea.
The report released by the administration of US President Joe Biden earlier this week said digital assets pose a threat to the US sanctions program.
“Technological innovations such as digital currencies, alternative payment platforms, and new ways of hiding cross-border transactions all potentially reduce the efficacy of American sanctions. These technologies offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system. They also empower our adversaries seeking to build new financial and payments systems intended to diminish the dollar’s global role,” the Treasury Department said in a report.
Sanctions have long served as a cornerstone of US foreign policy. Most of them target states such as North Korea and Iran for their role in human rights abuses, terrorism or other illegal activities.
The report proposes adapting sanctions to new financial instruments, as well as investing in modernizing the sanctions regime.
“In particular, Treasury should invest in deepening its institutional knowledge and capabilities in the evolving digital assets and services space to support the full sanctions lifecycle of activities.”
The administration of the US President repeatedly states the risks that cryptocurrencies carry for the national security of the United States.