North Korea has always been under suspicion for either being involved with some notorious projects or for directly or indirectly funding weapons of mass destruction using digital currencies. Recently, North Korea was accused of stealing cryptocurrency worth $2 billion to support the development of deadly weapons. Mostly South Korean and Japanese exchanges were targeted for the theft, and hackers used phishing to hack into user accounts. Although Kim Jong Un’s official state media, the Korea Central News Agency (KCNA), denied all allegations of this massive theft.
Now, North Korea claims that it is in the early stages of developing its very own cryptocurrency as a resort to avoid crippling international sanctions and also circumvent the U.S.-dominated global economic system. The proposed digital currency, which doesn’t have a name yet, will most probably be “more like bitcoin or other cryptocurrencies,” said Alejandro Cao de Benos, a special delegate for the Committee for Cultural Relations for the Democratic People’s Republic of Korea (DPRK) and also the official person in charge of North Korea’s cryptocurrency conferences. He added,
We are still in the very early stages in the creation of the token. Now we are in the phase of studying the goods that will give value to it, stating that there are no plans to digitize the Won as of now.
On the other hand, the North Korean Embassy in New York neither confirmed nor denied de Benos’s claim. The spokesperson from the embassy only said they are in “no position to give an answer,” and hung up.
Close watchers of North Korea’s use of cryptos have already reported that the regime has immense expertise to build and deploy its blockchain and cryptocurrency that would help the North Koreans avoid sanctions. Over the last few years, the country has exhibited extensive interest in cryptocurrencies, along with areas of mining, hacking exchanges, cryptojacking, and lots more.
The problem, however, lies in the fact that North Korea can skirt financial restrictions to some extent, by using cryptocurrencies. So even at a stage when sanctions from the U.S. hurt North Korea’s physical economy, there remain a handful ways in which America can curb Pyongyang’s growing digital economy. It implies that North Korea is powered with much greater ability to run its nuclear programs than we might think.
On top, if they build their cryptocurrency, Pyongyang would be directly able to control how it functions and who accesses it—the very same reason why other countries like Russia, Venezuela, and Iran have explored similar projects. This secretive country has vouched on cryptocurrencies, more than once, to raise cash via illegal avenues. Previously, Bitcoin has also been used by the country’s hackers, as a preferred currency for ransomware attacks on the West.