North Korea is in the early stages of developing its own cryptocurrency in a bid to avoid crippling international sanctions and circumvent the U.S.-dominated global financial system, a representative for the regime told VICE News.

Pyongyang has long shown an interest in cryptocurrencies, with the country recently bringing together homegrown experts with foreign companies at its first-ever blockchain and cryptocurrency conference in April.

The digital currency, which doesn’t even have a name yet, will be “more like bitcoin or other cryptocurrencies,” said Alejandro Cao de Benos, the official in charge of North Korea’s cryptocurrency conferences, and a special delegate for the Committee for Cultural Relations for the Democratic People's Republic of Korea (DPRK).

“We are still in the very early stages in the creation of the token. Now we are in the phase of studying the goods that will give value to it,” said Cao de Benos, adding that there are “no plans to digitize the [North Korean] won for now.”

North Korea's Embassy to the U.N. in New York would neither confirm nor deny Cao de Benos's claim. “I am not in a position to give you an answer,” an embassy spokesperson said before hanging up.

But close watchers of the regime’s use of cryptocurrencies told VICE News that North Korea already has the expertise needed to build and deploy its own cryptocurrency that could help the North Koreans avoid sanctions.

“North Korea has shown extensive interest in cryptocurrency, showing expertise in mining, hacking exchanges, cryptojacking, and more,” Kayla Izenman, a research analyst at London-based think tank the Royal United Services Institute, told VICE News. “There is absolutely no doubt that they have the technical expertise to develop and utilize almost any iteration of cryptocurrency, whether that means laundering a previously-established coin such as Bitcoin through foreign unregulated exchanges or creating a nationalized cryptocurrency for themselves.”

Weaponizing cryptocurrency

For North Korea, it’s worth trying. While bitcoin offers some anonymity, it has become easier for law enforcement and governments to track bitcoin payments across the world, and by building their own cryptocurrency, Pyongyang would be able to control how it works and who has access to it — the same reason countries like Russia, Venezuela. and Iran have explored similar projects.

The secretive country has repeatedly turned to cryptocurrencies to raise cash through illegal avenues. Recently, North Korean hackers were accused of stealing cryptocurrencies, mining them and using them to avoid restrictions imposed on traditional banking systems by international sanctions.

North Korea also uses bitcoin as a preferred currency for ransomware attacks on the West.

Pyongyang’s infamous state-sponsored hackers have helped amass more than $2 billion in fiat and digital currency in recent years to help pay for the country’s weapons program, according to a U.N. report seen by AP last month — a claim Pyongyang subsequently denied.

Its interest in the blockchain is not limited to simply stealing bitcoin, however. In 2018, Jonathan Foong Kah Keong, a captain based in Singapore according to his now-defunct LinkedIn profile, who the U.N. says has been helping North Korea evade sanctions since 2013, established a company in Hong Kong called Marine Chain that sold digital tokens in exchange for partial ownership of maritime vessels.

According to a U.N. investigation, “the platform could be used to generate money for the regime and as a potential means of evading sanctions on shipping by creating a new method of obscuring the ownership of a vessel.”

In 2017, Pyongyang University of Science and Technology began offering undergraduates a crash course in cryptocurrencies and blockchain. Federico Tenga, the Italian founder of bitcoin startup Chainside, traveled to Pyongyang to teach more than three dozen of the country’s elite students about bitcoin and blockchain technology that underpins it.

Now, he says, the country certainly has the capability to build its own digital coin.

“Developing a digital token does not require too much expertise, and for sure North Korea has enough human capital to handle this,” Tenga told VICE News.

But while experts believe Pyongyang is capable of building its own cryptocurrency, they're far from convinced the project will be remotely successful. Case in point: Venezuela’s failed Petro coin, which experts ultimately viewed as a propaganda exercise rather than a sincere effort to build a new monetary system.

Blockchain obsession

Cao de Benos claims some foreign companies even signed contracts with the North Korean government to develop blockchain systems in areas like education, medicine and finance.

However, he added that none of the “big names” attending the conference or signing contracts could be revealed, “due to sanctions and fake news.”

Last week, Cao de Benos announced the second blockchain conference scheduled for February, which again will exclude journalists from attending, though U.S. citizens are welcome.

Those looking to take part will need to send a CV, a scan of their passport and a home address in order to be considered. Successful applicants will need to hand over $3,750.

Cao de Benos is an unlikely booster for Pyongyang’s crypto-ambitions. The Spanish national, who is the only westerner known to be working directly for the North Korean regime, readily admits he’s not a blockchain expert but says, “I know the basics, follow the market and its developments.”

Cao de Benos was behind the country’s first website back in 2000, and he created the Korean Friendship Association as a club for fans of the despotic regime. His long relationship with Pyongyang has seen him granted honorary North Korean citizenship and he regularly appears on TV around the world as a spokesperson for the regime, typically wearing a North Korean military uniform heavy with state medals.

He was also arrested for possessing unlicensed firearms in Spain in 2016.

Though North Korean officials won’t divulge who will be attending its blockchain conference next February, experts believe that Russia could have a significant presence. The two countries have sought closer trading links in recent years, epitomized by Russian President Vladimir Putin's first-ever meeting with Kim Jong Un in Vladivostok earlier this year.

“The Russian government and Russian companies have been involved in a number of blockchain and cryptocurrency projects around the world,” Annie Fixler, an expert on sanctions and illicit finance at the conservative, Washington-based think tank Foundation for Defense of Democracies, told VICE News. “If there is strong Russian participation in the conference, that might indicate a level of seriousness and maturity.”

Russia, together with Iran and Venezuela have all voiced interest in creating nationalized cryptocurrencies in the past, which their leaders paint as tools to offset U.S. financial power and increase sanctions resistance.

But Pyongyang will need to convince international partners that its version of bitcoin is actually worth using, and one way of doing that is to show its digital coin can circumvent Western sanctions.

“Washington’s use of sanctions now is reliant on the dollar’s role in the global financial system – U.S. sanctions have significant secondary effects because non-US banks can’t risk losing access to dollar transactions by doing business with sanctioned persons,” Fixler said “If transactions can flow easily around the world without touching the dollar, then nations like North Korea are insulated from U.S. sanctions.”