Wally Adeyemo, Secretary of the U.S. Deputy Treasury, believes that Central bank digital currencies (CBDCs) like Russia’s digital ruble cannot threaten United States sanctions.
Digital currencies can’t reduce the U.S. dollar’s impact
Adeyemo, during an interview with CNBC on Wednesday, argued that despite the increasing demand for cryptocurrencies, the U.S. dollar will still dominate the world.
The secretary further pointed out that crypto assets provide many opportunities for the nation’s economy, but it brings a variety of challenges like money laundering. He added that there are ways to fight these problems in order to benefit from the growing industry.
“We do think that ultimately working together with countries around the world, we can address this concern by calling on the creators of digital currencies to follow the rules around Anti-Money Laundering more closely,” Adeyemo stated.
He further suggested that the digital currencies of different countries’ central banks are not associated with any kind of risks in terms of U.S. sanctions. Adeyemo said that the global economy is still inter-connected, which implies that even if digital currencies come into place, there would still be the scope of their sanctions impacting different economies.
The official further noted that Russian companies are highly involved in businesses with different countries, including American financial institutions with the U.S. dollars, because “America’s economy is the biggest economy in the world.”
Adeyemo’s comments came amidst Russian oligarch Oleg Deripaska calling on the Russian government for using BTC adoption as a tool to avoid U.S. sanctions which would eventually weaken the U.S. dollar’s dominance.
“The U.S. had realized long ago that uncontrolled digital payments are capable of not only nullifying the effectiveness of the entire mechanism of economic sanctions but also taking down the dollar as a whole,” he stated last month.
CBDCs and money laundering
According to recent reports from China, the digital yuan was used for money laundering by a group of 11 criminals, hinting that digital currencies are not truly fail-safe. According to the allegations, the group scammed a person by “making false claims of ordering an item with quality issues.”
As a result, the victim of the scam was asked by the group to transfer money into different accounts. The money in question was around 200,00 yuan ($31,000).
After scamming the person based in Xinmi, Chinese media further reported that the group used a digital yuan wallet and laundering the money and funnel it outside the nation. Hence, digital currencies are not completely fail-safe or risk-free.