Cryptocurrencies, Blockchain Technologies and International Sanctions

• In Event: Economic Coercion in Global Politics

Abstract

Since the advent of Bitcoin in 2009, cryptocurrencies have gained attention for their promise to distribute power and authority in global finance. The potential of these digital tokens to bypass existing actors and processes in enabling peer-to-peer transactions has prompted continual hopes that forms of financial exclusion, exploitation and extraction may be countered. However, efforts to actualize these promises have become associated with a range of illicit activities, including money laundering and the financing of terrorism. Drawing on policy documents, as well as interviews with experts and practitioners, this paper assesses dispersed (in)formal efforts by individuals, corporations and states to harness cryptocurrencies and their underlying blockchain technology in both evading and enforcing international sanctions. The practice of sanctioning individuals, companies and entire jurisdictions highlights tensions between existing and emerging configurations of power between the Global North and South. This paper specifically investigates whether and how applications of blockchains to cryptocurrencies enable new, or merely extend existing, financial/security infrastructures (de Goede 2020). In doing so, we identify the emerging possibilities and limits that technological changes pose for the socio-technical relations underlying sanctions and other financial/security practices.

Authors

• Francesco Giumelli, University of Groningen

• Malcolm Campbell-Verduyn, University of Toronto