U.S. Treasury Secretary Steven Mnuchin said he will work with the Group of 20 nations to prevent cryptocurrencies such as bitcoin from becoming the digital equivalent of an anonymous Swiss bank account.
Mnuchin also said that he is “not at all” worried that Russia may use cryptocurrencies to help its banks avoid international sanctions. An adviser to President Vladimir Putin is reported to have said that sanctions against Russia have created a need for digital currencies as officials there fear expansions in 2018.
Virtual currencies such as bitcoin, which has soared in price in recent months amid a rush by investors to buy the instrument, could help bypass any such U.S. measures because they allow users to remain anonymous.
Russian Prime Minister Dmitry Medvedev signed a decree last month allowing the government to classify purchases by the Defense Ministry, Federal Security Service and Foreign Intelligence Service as state secrets.
“This idea that Russia or Venezuela can thwart the pressure from sanctions just by developing their own cryptocurrency is silly,” said lawyer Erich Ferrari of Ferrari & Associates in Washington. “It’s like trying to do it by using cash. Yes you can do it more easily with cash, but it doesn’t mean you’re evading. It’s harder to get caught.”