US Treasury: Cryptocurrencies Reduce The Effectiveness of Economic Sanctions

The US Treasury Department said that the use of digital assets reduces the effectiveness of economic sanctions.

The growing use of digital assets around the world is contributing to the evasion of sanctions imposed by the United States on a number of countries, according to the US Treasury.

Technological innovations, including digital currencies, alternative payment platforms, and tools to conceal international transactions, may hinder the implementation of US sanctions. In addition, the US Treasury fears that using the latest technology, attackers can store and transfer funds outside the traditional financial system.

“Digital assets empower our adversaries to create new payment systems that can reduce the role of the US dollar in international financial transactions. If these risks are not eliminated, because of crypto assets and the latest payment systems, sanctions will no longer be effective, and this is a fundamentally important tool for protecting the interests of our state, ” the website of the US Treasury Department says.

At the same time, US Deputy Treasury Secretary Wally Adeyemo considers it necessary to interact more closely with participants in the cryptocurrency market and financial institutions. The Ministry of Finance intends to deepen research in the field of digital assets in order to expand its capabilities, coordinate its actions in the international arena and adapt current policies based on the knowledge gained.

As a reminder, in May, the US Treasury Department proposed expanding reporting requirements for cryptocurrency brokers, marketplaces, and custodian wallets to combat tax evasion. However, in an updated version of the US bipartisan draft law on extended taxation of cryptocurrencies, the definition of “broker” was narrowed down.