Cryptocurrencies, Blockchain Technologies and International Sanctions: Towards New or Old Financial/Security Infrastuctures?
Since the advent of Bitcoin in 2009, cryptocurrencies have gained attention for both the promises and pathologies these novel digital tokens offer in enabling peer-to-peer transactions in near real-time. Their largely distributed nature and lack of single overarching authority has contributed to associations of cryptocurrencies with transnational illicit activities. In addition to being implicated in several money laundering and terrorism financing schemes, cryptocurrencies are being harnessed by a number of governments seeking to circumvent international sanctions regimes imposed by the United Nations, United States and the European Union. At the same time, and in response to the advent of sanctions-evasion schemes utilizing cryptocurrencies, the US has enhanced sanction against Iranian actors while the EU has elaborated restrictive measures targeting financial crimes carried out with cryptocurrencies. How can we understand the roles of cryptocurrencies in both strengthening and circumventing international sanctions? Drawing on policy documents, as well as interviews with experts and practitioners in operating across the financial, security and sanctions worlds, this paper provides a first mapping of formal and informal efforts to both create new, and reinforce existing, financial/security infrastructures around cryptocurrencies and their underlying blockchain technologies. Harnessing conceptual insights from the study of infrastructures in Science & Technology Studies, our analysis points to both the possibilities and limits of geographically dispersed, socio-technical activities for effecting change in contemporary international power and legitimacy.
Project with: Malcolm Campbell-Verduyn