US officials have seen an increase in the use of digital assets to facilitate illicit finance since Russia invaded Ukraine, but the volume of transactions is too low to play a significant role in helping Moscow evade sweeping sanctions , a senior Treasury official said on Friday.
Nellie Liang, Undersecretary to the Treasury for National Finance, said the current state of digital assets would not be large enough to run an economy and the ecosystem is too underdeveloped for individuals to effectively escape. sanctions by using these assets.
“The deal size we saw is quite small,” Liang told Reuters in an interview. “Of course, we recognize that we may not see everything, but there is a fair amount of scrutiny. At this point, we just don’t see that it could be used on a large scale to evade sanctions. “
Liang said the Treasury has been studying the issue for years and advanced economies in the Group of Seven and other countries have also raised concerns about the use of digital assets for illicit finance, making enforcement imperative. effective.
“People are very aware of it and paying attention to it,” she said. “Although it is growing because the use of crypto is increasing, its share as a means of illicit finance is nowhere as large as simply using cash.”
Earlier this month, US Treasury Secretary Janet Yellen pledged to address potential loopholes in the tough sanctions imposed on Russia following its February 24 invasion of Ukraine, and said that there were anti-money laundering laws in place to prevent members of the Russian elite from using cryptocurrencies to evade these measures.
Russia calls its actions in Ukraine a “special military operation” which is not designed to occupy territory but to destroy its neighbor’s military capabilities.
Despite repeated assurances from Biden administration officials that crypto could not be used on a large scale to help Russia circumvent sanctions, several Democratic lawmakers, including Senator Elizabeth Warren, have expressed concern that the Russian oligarchs could turn to digital asset platforms, after being shut out of the traditional financial system.
Warren, along with 10 other Democratic senators, introduced a bill on Thursday that would allow the president to sanction foreign cryptocurrency companies that do business with sanctioned Russian entities and bar them from doing business with U.S. customers.
Liang, who will lead Treasury efforts to implement President Joe Biden’s recent executive order on cryptocurrencies, said she has yet to see the legislation.
This executive order directed the Treasury as well as the Department of Justice and other agencies to study the legal and economic ramifications of the creation of a US central bank digital currency and authorship reports on the role that cryptocurrencies will play into the evolving payments landscape.
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