As Bitcoin and other digital currencies could make it easier for Americans to avoid US sanctions, the Treasury’s acting undersecretary said regulating cryptocurrencies would be like trying to “put a square peg in a round hole.”
The “digital currency” is a type of cryptocurrency that is used to purchase goods and services. The US Treasury’s assistant secretary for terrorism and financial intelligence, Sigal Mandelker, has said that digital currencies won’t impact US sanctions.
According to US Deputy Treasury Secretary Wally Adeyemo, central bank digital currencies (CBDCs) such as Russia’s digital ruble pose no danger to US sanctions.
Despite the growing popularity of cryptocurrencies, Adeyemo stated in a CNBC interview on Wednesday that the US dollar “will remain the dominant currency in the world.”
Digital assets, according to Adeyemo, present “potential in many ways” for the US economy, but they also come with a slew of problems, including money laundering. However, there are methods to overcome this in order to reap the benefits of the expanding sector, according to the official:
“We believe that by working together with nations throughout the globe, we can eventually eliminate this danger by requiring developers of digital assets to adhere to more stringent anti-money laundering legislation.”
Adeyemo also said that the use of digital currencies by global central banks poses no danger of penalties from the United States.
“We think that even if a digital ruble or other digital currencies are introduced, our sanctions will still have an effect on their economies since the world economy remains interconnected,” he added.
The source went on to note that Russian firms conduct a lot of business across the globe, with a lot of it done in dollars with American financial institutions since “the American economy remains the world’s largest economy.”
“As long as that is the case, and as long as we make the necessary investments, we will be able to utilize our sanctions system to ensure that we avoid the very thing that it was designed to prevent,” the source said.
Adeyemo’s comments came after Oleg Deripaska, a sanctioned Russian tycoon, called on the Russian government to use Bitcoin (BTC) as a weapon to escape US sanctions and undermine the currency. He stated last month that “the United States has long ago grasped that unregulated digital payments are capable of not only nullifying the efficacy of the whole system of economic sanctions but also bringing the dollar down as a whole.”
The US Treasury Department has said that it must’modernize and adapt’ to digital currencies.
In October, Russia’s deputy foreign minister reaffirmed Russia’s intentions to lower the dollar’s proportion of the country’s overseas reserves as part of the country’s strategy to overcome the problems created by US sanctions.
In recent years, the United States has placed sanctions on Russia for a variety of reasons, including alleged poisoning of opposition leaders, electoral involvement, and cyberattacks.
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