US Treasury Department warns cryptocurrencies could dent efficacy of sanctions
The US Treasury Department expressed strong concerns over the number of sanctions imposed by the United States on other countries. The current government inherited an impressive package of restrictions that had been in force since the days of former US President Donald Trump.
According to the US Treasury Department, it is time to stop using this instrument of political leverage on opponents and become more selective in imposing economic sanctions. The officials fear that the effectiveness of US economic and financial sanctions could be undermined. The growing popularity and widespread adoption of cryptocurrencies makes it easy to evade most of the restrictions imposed by the United States. Whereas previously sanctions were regarded as a fundamentally important tool to advance national security interests and left no alternatives, now the situation has changed. Sanctions may face challenges including rising risks from cryptocurrencies.
US Deputy Treasury Secretary Wally Adeyemo believes that the government should work with partners and allies to modernize and strengthen such a critical tool as sanctions. At present, a significant part of sanctions issued by Washington is idle as digital currencies and alternative payment platforms "offer malign actors opportunities to hold and transfer funds outside the traditional dollar-based financial system," the Treasury Department noted. In addition, these technologies also empower other countries seeking "to build new financial and payments systems intended to diminish the dollar’s global role." Thus, all these factors could harm the efficacy of US sanctions.