By By Ken Hanly Feb 10, 2018 in Technology Juan Zarate served the George W Bush administration as a deputy advisor for combating terrorism after 9/11. He is credited with developing financial instruments that put pressure on sanctioned states. Zarate realizes that blockchain and cryptocurrency technology can give greater autonomy to individuals as well as encouraging commercial activities that are legitimate. Zarate's present status Zarate is senior advisor at the Washington DC-based think tank Center for Strategic and International Studies (CSIS) and also chair of the Financial Integrity Network. He was an early advocate of blockchain technology having been an advisor to Coinbase the US-based cryptocurrency exchange. US dollar domination and success of boycott financial tools Zarate notes that the success of the tools he developed to keep those sanctioned from using traditional financial markets was dependent on the domination of international finance by the US dollar, the world global reserve currency. Cutting off access to the dollar was a way of ensuring that those subject to boycotts would find it difficult to finance war or use funds to hurt US interests. However, Using blockchain technology to evade sanctions A Swedish firm has been granted a business license that permits it to build a platform explicitly designed to aid countries evade potential sanctions. The company promises that this will give investors the ability to promote "good, hard-working companies and individuals" in Iran. North Korea is reported by many cybersecurity firms as amassing bitcoin often by illegal methods such as hacking and theft in order to finance government operations. Many libertarian leaning supporters of the blockchain may be much less concerned about the evasion of any government control over blockchain operations as they intended to develop a system that was not dependent on third party intervention and to replace the existing system. Zarate appears to defend the status quo and wants to ensure that US dominance of finance is not threatened by the new technology. Potential risks of the blockchain Zarate notes that the value of state-backed fiat currency might be siphoned off into cryptocoins that know no borders and this could limit the ability of fiat money issuers to influence policy. The president of the Federal Reserve Bank of Philadelphia doubts that cryptocoins will ever effect that ability but central banks and legislators around the world are still considering this view. Some corrupt banks may be exploring the role of the blockchain as a way of evading detection of illegal activities rather than as a way of increasing transparency and gaining international trust. Venezuela has already announced it plans to launch its own oil-backed cryptocurrency specifically designed to get around "financial blockades". Russia also is looking to develop its own cryptocurrency. Zarate's responsible adoption of blockchain technology Zarate is all for adoption of the new blockchain technology but in a way that is mindful of the risks of that technology to the status quo where the present system can control access to finances and use dollar dominance as a weapon to advance US interests. US lawmakers show considerable concern about the developing technology. They convened a meeting of representatives from the US Securities and Exchange Commission (SEC) and the US Futures Trading Commission (CFTC) in Washington to answer their questions about the new technology. Members of both the SEC and CFTC saw a low risk of cryptocurrencies insofar as creating financial instability was concerned. However, they warned that the cryptocurrency area was still in an early development stage. These financial embargoes helped cut off terrorists from being funded. However, now Zarate worries that the new blockchain technology is undermining his creations and allowing sanctioned individuals and states to finance themselves without the banking system. The blockchain can break down borders and empower those outside any traditional banking system. Zarate said to CoinDesk:"There are nefarious actors out there, including state actors like North Korea and Iran that are looking to the use of digital currencies and related technologies, at a minimum as a way of circumventing the current global order which limits their access to capital. But ‎these capabilities and technologies could also be a way for them to try to undermine global financial commercial systems at some point."Zarate realizes that blockchain and cryptocurrency technology can give greater autonomy to individuals as well as encouraging commercial activities that are legitimate.Zarate is senior advisor at the Washington DC-based think tank Center for Strategic and International Studies (CSIS) and also chair of the Financial Integrity Network. He was an early advocate of blockchain technology having been an advisor to Coinbase the US-based cryptocurrency exchange.Zarate notes that the success of the tools he developed to keep those sanctioned from using traditional financial markets was dependent on the domination of international finance by the US dollar, the world global reserve currency. Cutting off access to the dollar was a way of ensuring that those subject to boycotts would find it difficult to finance war or use funds to hurt US interests.However, many countries are reacting to the US moves and the US dollar will no doubt continue to see its dominance decline. Currency such as the Chinese remnibi and Russian rouble are being used more in international trade. Using dollar dominance to keep others out of the international finance system just encourages such a development and is happening independent of any development of the blockchain.A Swedish firm has been granted a business license that permits it to build a platform explicitly designed to aid countries evade potential sanctions. The company promises that this will give investors the ability to promote "good, hard-working companies and individuals" in Iran.North Korea is reported by many cybersecurity firms as amassing bitcoin often by illegal methods such as hacking and theft in order to finance government operations. Many libertarian leaning supporters of the blockchain may be much less concerned about the evasion of any government control over blockchain operations as they intended to develop a system that was not dependent on third party intervention and to replace the existing system.Zarate appears to defend the status quo and wants to ensure that US dominance of finance is not threatened by the new technology. Zarate says : "Actors that are less invested in the global financial commercial system are likely to be more reliant on technologies or techniques that give them asymmetric capabilities to threaten that very system."Zarate notes that the value of state-backed fiat currency might be siphoned off into cryptocoins that know no borders and this could limit the ability of fiat money issuers to influence policy. The president of the Federal Reserve Bank of Philadelphia doubts that cryptocoins will ever effect that ability but central banks and legislators around the world are still considering this view.Some corrupt banks may be exploring the role of the blockchain as a way of evading detection of illegal activities rather than as a way of increasing transparency and gaining international trust. Venezuela has already announced it plans to launch its own oil-backed cryptocurrency specifically designed to get around "financial blockades". Russia also is looking to develop its own cryptocurrency. Zarate claims :"We have to be very conscious of the fact that there are actors in the system, both state and non-state that may be willing to disrupt that system. They may be willing to use new technologies to actually undermine those very systems to affect the U.S. economy and to affect other economies, and frankly, even to profit from it."Zarate is all for adoption of the new blockchain technology but in a way that is mindful of the risks of that technology to the status quo where the present system can control access to finances and use dollar dominance as a weapon to advance US interests.US lawmakers show considerable concern about the developing technology. They convened a meeting of representatives from the US Securities and Exchange Commission (SEC) and the US Futures Trading Commission (CFTC) in Washington to answer their questions about the new technology. Members of both the SEC and CFTC saw a low risk of cryptocurrencies insofar as creating financial instability was concerned. However, they warned that the cryptocurrency area was still in an early development stage. While Zarate more of less agrees he is concerned about the future saying: "I'm incredibly optimistic about these technologies, but having witnessed failures in the past of regulation and recognition of risk, and cascading risk, I want to make sure that with adoption comes evaluation of where those risks lie...And a recognition that we need greater transparency and not less, if we hope for these technologies to take hold." This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com More about blockchain technology, Sanctions, North korea blockchain technolog... Sanctions North korea