STEVE INSKEEP, HOST:
Several senators say they want to close a loophole in Western economic sanctions against Russia. Democrat Elizabeth Warren is one of them. She's proposed new legislation for cryptocurrencies. The bill would compel crypto platforms to know who their customers are and to block transactions if they're sanctioned. Warren is proposing a shift in how some of the industry does business.
ELIZABETH WARREN: Russian oligarchs can continue to use crypto to move their money around. So we're just going to give Treasury the authorization to treat these crypto platforms much like the banks are treated. That is, you've got to know your customer and you can't be dealing with people who are in violation of sanctions.
INSKEEP: I want to make sure that the ordinary person can follow what we're discussing here. In the traditional world, you might have money denominated in rubles. You might change it into dollars. You might change it into euros. That's now becoming very difficult for Russians to do. You're saying that what they might do instead is change it into cryptocurrency, which would make it easier to hide, and it might also retain its value. Is that it?
WARREN: That's exactly right. And in the same way that right now the U.S. government and other governments are going after the oligarchs who are the ones who help keep Putin propped up, we're going after their yachts, and we're going after their condos. We want to have the tools to be able to go after the value that they have hidden in crypto. And understand this is not just a theoretical problem. Russia is involved directly in about three-quarters of all of the value that changes hands because of ransomware. We know that Iran and other countries have evaded economic sanctions by using crypto currencies. So the threat is real. Russia's good at this. That's why it's important to have a tool available to the Treasury.
INSKEEP: Isn't the fundamental appeal of cryptocurrency for a lot of people the relative anonymity of it? And can the United States government really use financial tools to force that anonymity to go away?
WARREN: Well, you know, that's a real problem with crypto. Among those who use crypto right now are drug dealers, tax cheats, people who are engaging in ransomware and countries that are trying to evade economic sanctions. And the crypto world itself is divided over this. There are crypto platforms that function in some ways like banks that say we want to make sure that we're not helping people evade sanctions. We will do know your customer, and all this says is that's fine. As long as you're doing that, we have no problem with you. But there are others who say, nope, that's a feature. We want to keep it all anonymous. And that poses a threat to all of the rest of us.
INSKEEP: Senator Warren, as you probably know very well, the Western sanctions have triggered further talk from Russia, from China, from some other countries, of developing their own financial tools that can't be sanctioned by the United States and its allies. Saudi Arabia, for example, is now talking of selling oil to China denominated in Chinese currency rather than in dollars, which is the way that oil is almost always sold. I'm thinking of the enormous range of financial powers the United States has because it has been central to the global economy. My curiosity is whether those tools are a little bit like nuclear weapons. You can only use them once. And other parts of the world based around China may very well at some point come up with their own financial systems that are closed off and independent from the United States.
WARREN: We should be concerned about the growth of systems where no one can track value, where cheaters can hide out, where ransomware folks can collect their ransoms. But here's ultimately the point. Everybody - and this means everybody, not just in America but everybody around the world - wants a financial system they can count on. They may want an exception once in a while, but they want a financial system they can count on that when they get ready to cash out, they know their value will be there and they can get it back. Creating alternative systems where you can't count on that, where the Chinese government may seize it, where criminals may bring the whole system down, that's not what nations of the world, that's not what people of the world ultimately want.
INSKEEP: So you're not concerned about parts of the world led by China moving away from the U.S. dollar, creating their own version of the SWIFT banking system or any number of other steps.
WARREN: At the end of the day, anyone who puts their money with China knows that at the other end, when there's a problem, things go wrong, your nation is in a conflict with China, maybe the money will be there and maybe it won't. I just don't think that's going to work.
INSKEEP: Senator Elizabeth Warren of Massachusetts, always a pleasure. Thanks.
WARREN: Thanks. Transcript provided by NPR, Copyright NPR.