Cryptocurrency has always been intriguing to governments around the world. This is not for their own gain, but mainly because crypto is often perceived as a major threat to their economic and political power. A new foreign sanctions bill signed by President Trump could spell a very difficult future for cryptocurrency as a whole. Under the law, specific foreign governments are asked to monitor cryptocurrency circulation to combat terrorism and illicit financial trends.
New U.S. Law is Problematic
Every time a new piece of legislation is signed and turned into law, there is reason for concern. This has been especially true in the world of Bitcoin and cryptocurrency as of late. The so-called Countering America’s Adversaries Through Sanctions Act may bring a lot of problems to the cryptocurrency world in the near future. Among other things, the law covers anti-terrorist financing and combating illicit finance trends. It also touches on cryptocurrency in its current form, which is considered an illicit finance trend.
As a result of the new law recently signed by President Trump, several foreign governments are required to take action by monitoring cryptocurrency circulation within their borders. The countries affected by this directive are Russia, North Korea, and Iran. Two out of those three would not seem to be causing significant problems for cryptocurrency, as neither Iran nor North Korea is particularly active in the Bitcoin industry.
The exception is Russia, a country which has finally shown some appreciation for cryptocurrency in recent months. With the new law in place, the Russian government would effectively have to crack down on cryptocurrency usage once again. Although the U.S. proposal was designed to help counter terrorist financing, there has never been any evidence of cryptocurrency being used to successfully fund such operations. For some unknown reason, governments are still eager to connect the two topics.
It is certainly true that cryptocurrencies have created new money flows which remain largely unregulated. That is a problem for any government, even though it has become clear that regulating cryptocurrency is a futile effort. The only thing governments can do is go after the companies who facilitate such transactions, including exchanges and brokers. Even then, cryptocurrencies can still be traced in a peer-to-peer fashion without relying on centralized platforms subject to governance.
The recently passed law calls for discussion of trends in illicit finance including forms of value transfer such as cryptocurrencies. Additionally, it requires the collection of data regarding cybercrime or other threats that may be identified by the U.S. government in the future. This is not the first time we have seen such a directive, as a similar proposal was made by the U.S. Department of Homeland Security in May 2017.
All of this goes to show that the U.S. government is willing to attack cryptocurrency as a whole. Specifically, the country continues to impose its vision on other nations where Bitcoin can make a big difference, such as Iran, Russia, and North Korea. Having a global currency that could remove the need for the dollar is understandably a significant concern for the U.S. It will be interesting to see how this law impacts cryptocurrency in the future if at all.