Venezuela’s announcement that it will soon launch its own virtual currency, “El Petro,” with the express idea of evading U.S. financial sanctions, set alarm bells ringing in Washington about the looming threat to one of the principal weapons in the U.S. foreign-policy arsenal. News of of the virtual currency from Caracas comes on the heels of similar announcements from Moscow, which for years has been seeking a way around the U.S. dollar’s chokehold on its sanctions-strapped economy.
But the threat to America’s ability to sanction bad actors comes less from cryptocurrencies like El Petroor bitcoin, and more from accelerating technological developments in the financial sector that promise to elbow the United States out of its gatekeeper role. That includes new ways of conducting financial transactions, including through the blockchain — the decentralized ledger technology that underpins bitcoin but that is increasingly being used for regular transactions by banks, shipping companies, and other firms.
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