U.S. Sanctions Could be Undermined By Lack of Regulatory Clarity24. April 2023
• Anja Manuel, a former Department of State official, argued that if the U.S. is unable to maintain its dominance in financial innovation and payments, it could affect its national security policy on sanctions.
• She said that the U.S. uses sanctions to target “bad actors” like Iran or North Korea but these become harder to enforce when there are fintech solutions available for individuals looking to circumvent them.
• Manuel warned that other countries like Singapore, the U.K., and the EU were getting their act together while the U.S. had not yet established a thoughtful regulatory framework for payments innovation.
Lack of Regulatory Clarity Could Undermine US Sanctions
Anja Manuel, a former Department of State official, said that if the U.S. isn’t able to maintain its dominance in financial innovation and payments, it could impact its national security policy on sanctions during an April 21 Twitter Spaces discussion with Coinbase CEO Brian Armstrong and listeners.
US Uses Sanctions To Target Bad Actors
The Office of Foreign Assets Control (OFAC) of the Treasury Department enforces various sanctions on “bad actors” like Iran and North Korea but these become increasingly difficult to enforce when there are fintech solutions available for individuals looking to circumvent them. This is why it’s important for the United States to lead in innovation under clear rules which reinforces their ability to impose these measures successfully against those who would challenge them internationally or domestically through illicit activities such as money laundering or terrorism financing efforts which involve cryptocurrency assets or blockchain technology platforms as well as traditional banking methods involving fiat currencies such as dollars and euros amongst others used by most countries around the world today..
Other Countries Getting Their Act Together Faster Than The US
Manuel noted that while other countries like Singapore, the UK and EU were taking steps towards establishing more thoughtful regulatory frameworks in regards to payments innovation, America was lagging behind due largely in part because there had been no real effort made by regulators here thus far other than enforcement actions taken by agencies such as the Securities Exchange Commission (SEC). As a result this has created a major gap between what other nations have done with regards to this subject matter versus what has been done within our own borders here at home leaving us vulnerable from both an economic perspective as well as from national security standpoint considering those who would seek out ways of circumventing our laws through technological means involving cryptocurrencies or other digital asset technologies not regulated by OFAC currently..
Responsible Blockchains Could Help With US Sanctions
Manuel added that sanctions generally worked in “a world of traditional banks” along with responsible blockchains firms but not when there existed financial technology firms available to individuals looking to bypass restrictions imposed upon them by law enforcement authorities using whatever means necessary including digital assets such as Bitcoin or Ethereum amongst others popularly used online today globally speaking..
Overall Anja Manuel made some valid points about how lack of regulation clarity could undermine US sanctions if action isn’t taken soon enough by congress regarding this matter especially given how quickly China seems catching up on dominance in mobile payments both in sophistication and scale compared with what we’ve seen from America so far since OFAC began regulating crypto assets backin 2020 after they’d already been adopted widely across many different industries worldwide before then..