U.S.-based cryptocurrency exchange Coinbase has proposed using cryptocurrencies to ensure compliance with economic sanctions. The recommendation highlights that traditional financial infrastructure makes money laundering and sanctions evasion in fiat currencies easy.
Coinbase Chief Legal Officer Paul Grewal discussed the increasing number of global sanctions imposed during the Russia-Ukraine conflict. Cryptocurrency exchanges support the government’s decision to impose sanctions on individuals and territories. He also emphasizes their importance in promoting national security and deterring illegal aggression.
Grewal noted that despite years of government sanctions, fiat money laundering by traditional financial institutions remains the most popular method of evading sanctions.
On the other hand, Grewal argues that digital asset transactions are inherently public, traceable, and persistent. These three are the essential characteristics that government agencies can use to detect and deter evasive behavior.
Some of the proactive steps Coinbase has taken to implement the global sanctions program include blocking access to flagged entities during the login process, detecting evasion attempts, and using sophisticated blockchain analyzers to predict threats.
Additionally, other crypto companies have begun to prevent further the use of cryptocurrencies under the sanctions proposed by the U.S. government. For example, Prague-based crypto wallet provider Satoshi Labs stopped shipping crypto wallets to Russia.
Satoshi Labs spokeswoman Kristýna Mazánkov said that while Bitcoin (BTC) is apolitical, the move to limit shipments of Russian crypto wallets was made because company employees are involved in the conflict, which makes it personal.
In addition to helping law enforcement track suspicious activity through a transparent blockchain, cryptocurrencies play a vital role in protecting personal privacy. This principle exists in the traditional financial system.
State Bank Of Pakistan Governor Says Cryptocurrencies Are Useless
State Bank of Pakistan (SBP) Governor Riza Baqir made a surprising but interesting point about cryptocurrencies. Riza Baqir has announced during a panel discussion at the 13th Karachi Literature Festival.
During the panel discussion, Dr. Baqir discussed that the technology behind crypto is beneficial and can solve many of the world’s current financial problems. But he also said that every new thing has advantages and risks. He claims it is his job to balance and assess whether those benefits outweigh the risks.
Dr. Baqir also discussed that SBP’s ultimate goal is to promote financial inclusion and reduce abuses in the financial system. He also mentioned that this goal has become more important as Pakistan is on the Financial Action Task Force (FATF).
In other words, since Pakistan has been under surveillance for multiple money laundering and terrorist financing charges since 2018, cryptocurrencies are not illegal. Still, the FATF has urged the government to regulate the industry.
It is still worth noting that Pakistan’s cryptocurrency trading and mining industry is booming. However, the governor insisted that the risks of crypto outweigh the benefits. He added that the SBP has been working hard to develop an appropriate approach to the future of cryptocurrencies.
Ukraine Government Now Accepts Over 70 Crypto Assets As Donations
Crypto payment processor Coingate and International Business Settlement (IBS) have reached an agreement with the National Bank of Ukraine (NBU) to allow well-wishers to donate to Ukraine through more than 70 different crypto assets.
This addition to the list of accepted crypto assets comes just days after the Ukrainian government responded to a request from Polkadot creator Gavin Wood to add DOT to the list of cryptocurrencies that accept donations. Shortly after the Ukrainian government announced it would accept Polkadot donations, Wood made good on his promise. They donated more than $5 million worth of DOT tokens.
As a result, the Ukrainian government decided to accept DOT and three other cryptocurrencies. This has prompted other players in the crypto space, including Tron founder Justin Sun, to contact the Ukrainian government similarly.
In comments following the announcement, Coingate co-founder Dmitryus Borisenka condemned the conflict, which he said was undermining the freedoms of Ukraine and its people.
Another Coingate executive, Matas Kibildis, has explained in a report how cryptocurrencies are now showing their importance.
Meanwhile, a report by the cryptocurrency news outlet revealed that international payments firm International Business Settlement (IBS) was also involved in the deal.
According to the report, all cryptocurrency donations are converted into euros. The IBS is responsible for approving payments and sending them to a particular donation account. The central bank sets up that specific donation account.
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