US Treasury: We Don't See Crypto Can Be Used Massively

The US Treasury says the possibility of crypto being used by Russia to evade sanctions is very small. (Photo; Kanchanara - Unsplash)

JAKARTA – In the midst of financial sanctions imposed on Russia, there is speculation that Russia is avoiding sanctions through cryptocurrencies. This was denied by the deputy finance minister for domestic finance Nellie Liang.

She stated that there was very little chance of evading sanctions by leveraging cryptocurrencies. The reason is that the current crypto market is not big enough to drive the economy.

The crypto ecosystem is also judged to be too underdeveloped to effectively facilitate the evasion of economic sanctions on a large scale. Liang made this statement in an interview with Reuters.

“The transaction size we saw was quite small. Of course, we are aware that we may not see everything, but there is a fair amount of scrutiny,” added Liang as quoted by Bitcoin.com News.

"At this point, we don't just see that it can be used massively to evade sanctions," he added.

The official revealed that the Treasury Department has been studying the matter for years. In addition, the G7 Organization, developed countries have raised concerns regarding cryptocurrencies being used to violate the financial system.

“While (crypto) is growing as use of crypto grows, its share as an intermediary for illegal finance is not as big as using cash.”

Although multiple sources confirm that cryptocurrencies are not currently an effective tool for sanctions evasion on a large scale, Senator Elizabeth Warren remains deeply concerned.

Responding to the possibility of Russia evading sanctions by leveraging cryptocurrencies, Senator Warren immediately launched a bill aimed "to ensure that Vladimir Putin and the Russian elite do not use digital assets to weaken the international community's economic sanctions against Russia following the invasion of Ukraine."

Meanwhile, US President Joe Biden signed an executive order on crypto regulation last week. The order directs the secretary of the treasury to work with all relevant agencies to produce reports on the future of money and payment systems. Liang will lead the Treasury's efforts to implement the executive order.

Until now the crypto market is recovering after some time before being shaken and experiencing price declines. This was due to negative sentiments that arose from geopolitical conditions such as the Russian invasion of Ukraine.

At the time of writing, data from Coingecko shows that the number one cryptocurrency in the world, Bitcoin (BTC), has increased by 8.1 percent in the past week. BTC was trading at the level of IDR 586.062.895.