US Treasury Deputy Sec Says Digital Currencies Will Not Impact US Dollar, Sanctions

Despite the $2.6 trillion industry that the digital currencies ecosystem represents, the United States Treasury Deputy Secretary, Wally Adeyemo believes the nascent asset class will not impact the dominance of the US Dollar in global financial transactions. Adeyemo acknowledges the fact that cryptocurrencies present a number of opportunities for the economy, however, the risks they represent are also obvious.

Some of the risks, according to the Treasury boss, including their susceptibility to being used in illicit transactions, can be curtailed by working alongside other countries.

“We know that digital assets have the ability to be used by those who want to illicitly move money through the system in a way that doesn’t touch the dollar and that we can’t see as easily. But 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,” he said.

Beyond addressing the risks digital currencies present, Adeyemo also pointed out that maintaining a growth-oriented policy in America will also help maintain the Dollar’s dominance.

“Ultimately the thing that is going to drive the dollar’s position in the world are the decisions we make in America about investing in our economy. The reason that people are involved in the dollar-based economy … is because they want to invest in America,” he added.

US Treasury Sanctions Will Always be Effective

The Treasury executive also shared his stance on the potential effectiveness of US sanctions on foreign economies that are gradually adopting different types of digital currencies including Central Bank Digital Currency (CBDC) as a means to bypass the laid out sanctions. Russia is one of these nations with an active Digital Ruble development. The potential CBDC according to Adeyemo will not impact the ultimate objectives of American 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. “Companies in Russia still do a great deal of business around the world. A lot of that business is done in dollars, it is done with American financial institutions and that is because the American economy remains the biggest economy in the world.”

With Adeyemo’s stance, earlier concerns by the Treasury Department on the likelihood of privately issued digital currencies hampering the efficacy of American sanctions as reported by TheCoinRise appear not to be as grievous as anticipated.