Digital currencies won’t impact US sanctions, Treasury exec says
Central bank digital currencies (CBDC) like Russia’s digital ruble do not pose any threat to United States sanctions, according to U.S. Deputy Treasury Secretary Wally Adeyemo.
In a CNBC interview on Wednesday, Adeyemo argued that the U.S. dollar “will remain the dominant currency in the world” despite the increasing popularity of cryptocurrencies.
Adeyemo pointed out that digital assets provide an “opportunity in lots of ways” for the U.S. economy, but it’s also associated with many challenges such as money laundering. However, there are ways to combat this in order to benefit from the growing industry. The official said:
“We do think that ultimately working together with countries around the world, we can address this risk by calling on the creators of digital assets to follow the rules around Anti-Money Laundering more closely.”
Adeyemo also suggested that digital currencies by global central banks are not associated with any risks in terms of U.S. sanctions.
“We believe that even if a digital ruble or other digital currencies come into place, there will still be scope for our sanctions to have an impact on their economies simply because the global economy is still inter-connected,” he said.
The official went on to say that companies in Russia do a lot of business around the world, with much of it being done in U.S. dollars with American financial institutions because the “American economy remains the biggest economy in the world.”
“As long as that is the case, and as long as we make the investments that are needed, we are still going to have the ability to use our sanctions regime to make sure that we prevent the thing that it was created to prevent,” the official noted.
Adeyemo’s remarks come shortly after sanctioned Russian oligarch Oleg Deripaska called on the Russian government to adopt Bitcoin (BTC) as a tool to avoid U.S. sanctions and weaken the U.S. dollar. “The U.S. had realized long ago that uncontrolled digital payments are capable of not only nullifying the effectiveness of the entire mechanism of economic sanctions but also taking down the dollar as a whole,” he argued last month.
Related: US Treasury says it must ‘modernize and adapt’ to digital currencies
In October, the deputy minister of Foreign Affairs of Russia also reiterated Russia’s plans to reduce the U.S. dollar share in Russia’s international reserves as part of the country’s plan to avoid challenges posed by sanctions from the U.S. government.
The U.S. has imposed a number of sanctions on Russia in recent years for reasons such as suspected poisoning of opposition politicians, election interference and cyberattacks.