U.S. Treasury says it must 'modernize' and 'adapt' to digital currency

The U.S. Department of the Treasury released a review of the sanctions and recommended that the government do more to develop infrastructure and policy on digital assets.

In an Oct. 18 report, the U.S. Treasury Department said the increased use of digital assets has hindered the implementation of sanctions while balancing funding for legitimate humanitarian organizations. The department suggested that, in addition to "deepening its institutional knowledge and capabilities," better communication between it and the crypto industry, financial institutions, and others could help improve current policy.

“Sanctions are a vital tool in advancing our national security interests,” said Treasury Undersecretary Wally Adeyemo. Treasury’s sanctions review shows that this powerful tool continues to be effective but faces new challenges. We are committed to working with our partners and allies to modernize and strengthen this critical tool. "

The report added:

"If left unchecked, these digital assets and payment systems could compromise the effectiveness of our sanctions."

According to the report, the U.S. Treasury recommends that the administration adopt a structured policy framework, coordinate with allies and partners where possible, ensure sanctions are understandable, enforceable, and adaptable, and impose sanctions to " Mitigate unintended economic, political and humanitarian impacts". It should modernize, including "the right expertise, technology and people," to address the challenges of digital assets, the department added.

The U.S. Treasury Department has been imposing sanctions as part of the government's crackdown on ransomware attacks that threaten the nation's infrastructure. For example, in May of this year, the Russia-based hacker group DarkSide attacked the Colonial Pipeline system. Last month, the U.S. Treasury Department announced it would impose sanctions on Russian firm Suex OTC for allegedly allowing hackers to access cryptocurrencies used as payment for ransomware attacks.

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