Lack of regulatory clarity on payment solutions could undermine US sanctions, says expert
According to former Department of State official Anja Manuel, if the United States isn’t able to maintain its dominance in financial innovation and payments, it could affect its national security policy, specifically on sanctions.
Speaking to Coinbase CEO Brian Armstrong and listeners in an April 21 Twitter Spaces discussion, Manuel said that because the U.S. was one of the biggest global leaders in payments, it allowed the government to enforce sanctions on “bad actors” like Iran or North Korea. According to Manuel, letting the country lead in innovation under clear rules reinforced U.S. national security controls, but China seemed to be catching up on dominance in mobile payments “both in sophistication and scale.”
“While we’re hemming and hawing here and not having a thoughtful regulatory framework in the U.S., China is marching forward, lots of other people are marching forward,” said Manuel. “If Chinese payments solutions, for example, gained a dominant foothold in the developing world, [sanctions are] going to become much, much harder.”
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The U.S. enforces sanctions through the Office of Foreign Assets Control of the Treasury Department, which has announced several actions against Russian nationals and groups related to their involvement in the war on Ukraine — including sanctions on crypto wallets. The former Department of State official said sanctions generally worked “in a world of traditional banks” and “responsible” blockchain firms, but not when there existed financial technology firms available to individuals looking to circumvent restrictions.
Manuel
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