U.S. officials have noted a rise in the use of digital assets to facilitate illicit financing since Russia invaded Ukraine, but the transaction volume is too small to play a significant role in helping Moscow evade widespread sanctions, a US official said on Friday. senior Treasury official.
Nellie Liang, Treasury undersecretary for domestic finance, said the current state of digital assets would not be large enough to run an economy, and the ecosystem is too underdeveloped for people to effectively evade sanctions using such assets. assets.
"The size of the transaction that we have seen 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 oversight. 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 from the Group of Seven and other countries have also raised concerns about the use of digital assets for illicit financing, making effective enforcement imperative.
"People are very aware of it and pay attention to it," he said. โWhile it is growing because the use of cryptocurrencies is growing, its share as a means of illicit finance is not as large as the use of cash.โ
US Treasury Secretary Janet Yellen earlier this month promised to address potential loopholes in tough sanctions imposed on Russia following its February 24 invasion of Ukraine, saying anti-money laundering laws were in place. money to prevent members of the Russian elite from using cryptocurrencies to circumvent those measures.
Russia calls its actions in Ukraine a "special military operation" that is not designed to occupy territory but to destroy its neighbor's military capabilities.
Despite repeated assurances from Biden administration officials that cryptocurrencies could not be used on a large scale to help Russia circumvent sanctions, several Democratic lawmakers, including Sen. Elizabeth Warren, have raised concerns that Russian oligarchs can turn to digital asset platforms as they have been excluded. the traditional financial system.
Warren, along with 10 other Democratic senators, introduced a bill Thursday that would allow the president to sanction foreign crypto companies that do business with sanctioned Russian entities and prevent them from transacting with American clients.
Liang, who will lead Treasury's effort to implement President Joe Biden's recent executive order on cryptocurrencies, said he had not yet seen the legislation.
That executive order directed the Treasury, along with the Justice Department and other agencies, to study the legal and economic ramifications of creating a U.S. central bank digital currency and the author reports on the role cryptocurrencies will play in the future. evolving payments landscape.
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