Sun. Aug 7th, 2022

With the interconnectivity of the global economies and the growth a capitalism economic sanctions have become a viable method of exerting pressure on a country without the threat of violence or war.

Economic Sanctions Explained

The Council on Foreign Relations explains Economic Sanctions as:

“Governments and multinational bodies impose economic sanctions to try to alter the strategic decisions of state and nonstate actors that threaten their interests or violate international norms of behavior. Critics say sanctions are often poorly conceived and rarely successful in changing a target’s conduct, while supporters contend they have become more effective in recent years and remain an essential foreign policy tool. Sanctions have been the defining feature of the Western response to several geopolitical challenges, including North Korea’s nuclear program and Russia’s intervention in Ukraine.”

Economic sanctions are defined as the withdrawal of customary trade and financial relations for foreign- and security-policy purposes.

Tools of Political War

The US has imposed sanctions against Iran, Venezuela, North Korea,  and Russia in recent years. These tools seems to be favorite actions of US President Donald Trump, as he can impose sanctions quickly and easily with an executive order.

The growth of cryptocurrencies are posing a threat to these economic threats. Venezuela introduced their own currency to circumvent the embargo on oil. Their attempts have not been successful to date.

Iranian Sanctions

Whereas Iranian cryptocurrency developers have created a blockchain platform, IranRescueBit, to facilitate aid donations in Bitcoin, Ethereum and Litecoin — a move that threatens to undermine sanctions at the center of the Trump administration’s “maximum pressure” campaign. Iran could leverage cryptocurrencies, crypto exchanges and brokerages, and other cryptocurrency applications to evade sanctions and ease the financial strain on Iranian companies.

Axios reported that in July, officials announced a domestically encrypted digital currency that would free up the frozen assets of local banks. It would be overseen by the Central Bank of Iran and backed by gold reserves.

Iran’s cabinet then ratified a bill on Aug. 4 clarifying that foreign cryptocurrencies are not legal tender and that the central bank would not recognize domestic transactions in cryptocurrencies.

Saeed Muhammad, commander of the Islamic Revolutionary Guard, said in a speech Wednesday that Iran should look to cryptocurrencies to bolster international investment despite heavy sanctions on the nation, reported Coinit.ir.

North Korea

Despite U.N. sanctions against North Korea since 2006, designed to curb its nuclear missile programs, the kingdom reportedly brought in up to $2 billion for those programs with the use of cyberattacks in recent years, Reuters reported that the U.S. government refers to the North Korean government cyber activity under the name Hidden Cobra.

Recently an American was charged after going to the North Korea tech event last April to “deliver a presentation and technical advice on using cryptocurrency and blockchain technology to evade sanctions,” the Department of Justice said.

By Gerelyn