In Washington’s latest round of sanctions against Russia, the U.S. government targeted specific bitcoin addresses. Here’s an excerpt from Bitcoin Magazine’s reporting.
“…the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), recently announced sweeping sanctions to curb the work of Russian online influence outfit the Internet Research Agency (IRA). This included adding several bitcoin addresses to its “Specially Designated Nationals” list of entities that U.S. citizens are blocked or prohibited from dealing with.”
It’s fascinating to watch the politics of bitcoin unfold in real time. It’s a decentralized, permissionless currency. But as these sanctions show, it can still be tampered with by governments. I suspect this trend is just beginning.
One of the major ways a government can crack down on crypto is to limit its convertibility with fiat money, as China does. However, I don’t think that option is likely to be seen in the U.S. I think the recent Coinbase initial public offering (IPO) shows that crypto is going legit in the U.S. — not the other direction.
Nonetheless, government interference is definitely a trend worth watching. Turkey is now trying to ban all crypto purchases as well. Here’s an excerpt from a Reuters article on the subject (emphasis mine).
The decision could stall Turkey’s crypto market, which has gained momentum in recent months as investors joined the global rally in bitcoin, seeking to hedge against lira depreciation and inflation that topped 16% last month.
I suspect government interference will become a recurring theme as inflation picks up around the globe. Citizens will turn to crypto (mostly bitcoin for store of value) as faith in fiat currency declines. And some governments will respond to that movement with sanctions and regulations against crypto. It will be an interesting story to watch develop.