cryptocoin.com Cryptocurrencies and digital assets have made great strides this year as institutional giants and countries like El Salvador have embraced Bitcoin and crypto assets in their financial ecosystems. But this has become a growing concern for the Joe Biden administration. In a report released yesterday by the US Treasury Department, the role of cryptocurrencies in circumventing the sanctions and the loss of function of the dollar on a global scale was included.
Why is the US concerned about cryptocurrencies?
The US Treasury Department has released a report on a sanctions review that claims digital assets undermine US-initiated sanctions programs. The following points are highlighted in the report:
Technological innovations such as digital currencies, alternative payment platforms, and new ways to hide cross-border transactions all potentially reduce the effectiveness of American sanctions. These technologies offer malicious actors opportunities to hold and transfer funds outside of the traditional dollar-based financial system. It also empowers our competitors who are trying to build new financial and payment systems aimed at reducing the dollar’s global role.
The US dollar is the currency of trade in the international market, and the US has so far imposed at least 9,000 sanctions against businesses and countries found to be violating different regulations. However, cryptocurrencies have become quite popular among countries that have been sanctioned to circumvent restrictions. Recently, Iran has been advocating the use of Bitcoin for international trade deals.
The US Treasury wants to deepen its knowledge of digital assets
The official review report states that the agency needs to deepen its knowledge of the development and service area of digital assets to support the full enforcement lifecycle:
In particular, the Treasury should invest in deepening its corporate knowledge and capabilities in emerging digital assets and services to support the full enforcement lifecycle of operations.
The Joe Biden administration was also the first to significantly address the ransomware threat and not issue warnings of such attacks. On the other hand, it has issued the first sanctions in the case against a Russian exchange, as a crypto ransom worth about $590 million was paid in 2021 alone. The US Treasury Department has managed to correlate over $5 billion in Bitcoin (BTC) ransom payments over the past decade.
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