With the June 12 summit between President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE and North Korean dictator Kim Jong Un just a few days away, a critical unanswered question is: Will international sanctions continue to be effective in the new world of cryptocurrencies and other forms of digital money?

Kim is reportedly looking toward cryptocurrencies as a “new tool to increase independence and ease some of the economic burden [of sanctions].”

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Cybersecurity firm Recorded Future has linked North Korea to cyberattacks on investors and exchanges, while South Korea has accused the North of stealing millions of dollars in cryptocurrencies.

Priscilla Moriuchi, a former NSA cybersecurity official, estimates North Korea also earns between $15 million and $200 million by mining and selling cryptocurrencies.

In addition, North Korea has pursued other avenues for obtaining cryptocurrencies. These include ransom paid to North Korean wallets in bitcoin during the country’s attack on UK hospitals in May of last year.

But what’s most concerning to many observers is the possibility that North Korean cyberspecialists will someday create their own cryptocurrency to dodge U.S. and U.N. sanctions.

They wouldn’t be the first. With Western sanctions crippling their economies, Iran, Russia and Venezuela are already exploring state-sponsored cryptocurrencies as an escape hatch:

In Iran, state-controlled press TV reported that the country’s Information and Communications Technology Minister favors cryptocurrencies as a vehicle for “circumventing sanctions because they are not under the supervision of the U.S. financial regulatory body.”

In Russia, the Financial Times reported that Putin economic advisor Sergei Glazev supports the creation of a CryptoRuble as a useful tool to “settle accounts with our counterparties all over the world with no regard for sanctions.”

And in Venezuela, President Nicolas Maduro has declared that its newly launched Petro will serve as a kind of “kryptonite” against the power of the U.S government, according to Time.

Moreover, both Iran and Venezuela are reportedly coordinating their cryptocurrency planning with Russia, aiming to create a block of countries that could challenge Western-dominated financial markets, or at least create an independent system for international transactions.

This news raises a couple of urgent questions for investors and policymakers. One is whether it will be possible for adversarial or rogue nations to create cryptocurrencies that compete with those presently available.

The answer is that it is not likely. The entire concept of state-sponsored cryptocurrencies is an oxymoron, especially under an authoritarian regime.

For a cryptocurrency to achieve any measure of adoption, it must adhere to four fundamental democratic principles that are the essence of cryptocurrencies.

One is resistance to censorship, which would be a direct threat to any government that censors its media.

A second is that it must be open to all participants without government permission, which is virtually impossible in a government-controlled economy.

A third is that it must be borderless, which is unthinkable under a regime that wants to restrict the flow of people and money in and out of the country.

Finally, it must be decentralized, the polar opposite of highly centralized government operations.

Thus, by its very nature, a government — let alone an authoritarian one — cannot issue a cryptocurrency that would have any chance of competing with existing cryptocurrencies. No one would want to use them – even in their own countries.

These would be not be cryptocurrencies. They would be strictly traditional government-issued money in digital form, using some of the same advanced technology that cryptocurrencies use.

The second pertinent question is whether it would be possible for adversarial or rogue nations to use state-backed digital money to help establish an alternate system of international transactions, thereby weakening the West’s ability to use sanctions as leverage against them.

The answer is yes, provided they can handle large volumes.

Currently, virtually all international transactions are cleared under the auspices of the Society for Worldwide Interbank Financial Transactions (SWIFT). With digital money, a consortium of countries like North Korea, Venezuela, Iran, Russia and others could establish a system of payments that is faster and more efficient.

Moreover, thanks to the higher level of security that this new form of digital money could provide, their payment system could be an attractive alternative to countries seeking to avoid sanctions.

This prospect is of only tangential interest to investors.

But it is worthy of urgent review by global monetary authorities, particularly if President Trump intends to continue using sanctions for leverage in his negotiations with North Korea and others.

Martin D. Weiss is the founder of Weiss Ratings, and has a doctorate from Columbia University. Neither he nor his company accepts any compensation from rated entities. His cryptocurrency investments are limited to a small model portfolio for investors that’s fully disclosed.