Cryptocurrencies and digital assets have made great headway this year as institutional giants and countries like El Salvador have adopted Bitcoin and crypto assets in their financial ecosystem. However, this has become increasingly a cause of worry for the Biden administration. The US Treasury Department released a Sanctions review report claiming that digital assets undermine sanctions programs initiated by the US. The official report read,
“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 collar-based financial system. They also empower our adversaries seeking to build new financial and payment systems intended to diminish the dollar’s global role,”
The United States Dollar is the currency of trade in the international trade market and the US has issued at least 9,000 sanctions against businesses and countries found violating different regulations. However, crypto assets have become quite popular among sanctioned nations to pass the restrictions. Most recently, Iran has advocated for the use of Bitcoin for international trade settlements.
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US Treasury Wants to Deepen its Knowledge on Digital Assets
The official review report cited that the agency must deepen its knowledge on evolving digital assets and services space to support the full sanctions lifecycle of activities.
“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,”
Biden administration also became the first to take the ransomware threat significantly and not issue warnings against such attacks but also issued first sanctions in the case against a Russian exchange as nearly $590 million worth of crypto ransom has been paid in 2021 alone. The US Treasury Department has linked over $5 billion in Bitcoin ransom payments over the past decade.