Close
  • Loading ticker data...
Coin Prices →
Cryptocurrency

Bush Administration security advisor warns against cryptocurrency ‘Cold War’

Former deputy national security advisor Juan Zarate has warned that cryptocurrencies might inadvertently destroy the sanctions tools that have put pressure on enemies of the US government.

Written by Bryan Smith Published on

Juan Zarate, former deputy assistant to US President George W. Bush, and a former deputy national security advisor, has warned that cryptocurrencies could pose a major threat in undoing financial embargoes that have stemmed the tide of terrorism.

Speaking to CoinDesk, Zarate elaborated his belief that blockchain technology might ultimately be ‘weaponized’ to fuel illicit activities all over the world.

In a statement, Zarate offered that:

“There are nefarious actors out there, including state actors like North Korea and Iran that are looking to the use of digital currencies and related technologies, at a minimum as a way of circumventing the current global order which limits their access to capital. But ‎these capabilities and technologies could also be a way for them to try to undermine global financial commercial systems at some point.”

Zarate is credited with developing sanctions tools and new financial instruments that ultimately exerted enormous pressure on fundamentalist religious groups in the wake of the September 11th attacks in New York.

In his book “Treasury’s War: The Unleashing of a New Era of Financial Warfare”, Zarate described how, through enforcing the US Dollar’s status as the primary global reserve currency, the US was effectively able to place financial strangleholds on nations or groups seeking to undermine or otherwise attack the country.

Zarate clarified his view that blockchain technology needn’t be for the exclusive use of malicious persons or groups, and offered that cryptocurrencies could provide ‘greater autonomy’ to individuals and could further boost ‘commercial activity’.

A new global paradigm

Zarate outlined that he views cryptocurrencies as a potential herald of risk; one that could enable rogue nations to embrace blockchain technology for peer-to-peer transfer, and essentially bypass international sanctions.

Zarate’s concerns have already been brought to light; North Korea has continued in unremitting attacks against South Korean cryptocurrency services with the view of ensaring various cryptocurrencies.

Other routes have been taken, as well: Venezuela’s President Nicolás Maduro recently announced the creation of a national, oil-backed cryptocurrency dubbed the Petro, which – should other nations participate – might enable to country to escape crippling sanctions imposed upon it by the United Nations and the United States.

Zarate described that cryptocurrencies could ultimately shatter ‘financial blockades’, describing that “We have to be very conscious of the fact that there are actors in the system, both state and non-state that may be willing to disrupt that system… They may be willing to use new technologies to actually undermine those very systems to affect the U.S. economy and to affect other economies, and frankly, even to profit from it.”

Adoption

Zarate concluded his statement to CoinDesk by elaborating his optimism about blockchain technology, though the former advisor warned that it was ultimately up to firms and governments to explore the responsible adoption of cryptocurrencies and blockchain technology, remarking that“…having witnessed failures in the past of regulation and recognition of risk, and cascading risk, I want to make sure that with adoption comes evaluation of where those risks lie… And a recognition that we need greater transparency and not less, if we hope for these technologies to take hold.”

Have your say!

What are your thoughts? Could the use of blockchain technology free global markets and trade without the added cost of potentially fuelling terrorism or upending political certainty? Let us know your view on Twitter – @coininsidercom!

Written by

South African technology journalist, podcaster, photographer and filmmaker. Hodling - BTC, NEO, ETH.@bryansmithsa

Related Articles