In a stern warning delivered at a Blockchain Association event in Washington D.C., U.S. Deputy Secretary of the Treasury, Wally Adeyemo, expressed serious concerns regarding non-U.S. stablecoin issuers that use the U.S. dollar as their backing currency. He emphasized the need for these foreign issuers to implement robust procedures to prevent illicit activities and ensure accountability.
Concerns over dollar-backed stablecoins
Deputy Secretary Adeyemo did not mince words as he addressed the audience at the Blockchain Association event. He voiced his reservations about foreign stablecoin issuers enjoying the privilege of using the U.S. dollar without the corresponding responsibility to prevent misuse by bad actors, including terrorists.
Adeyemo stressed the importance of holding such entities accountable, stating,
“We cannot allow dollar-backed stablecoin providers outside the United States to have the privilege of using our currency without the responsibility of putting in place procedures to prevent terrorists from abusing their platform.”
Continued lack of industry compliance
Adeyemo’s remarks come in the wake of his previous statements in 2022, where he urged the cryptocurrency industry to take proactive measures to prevent the exploitation of virtual assets by transnational criminal organizations, terrorists, and rogue states.
Expressing disappointment in the industry’s progress, he noted,
“While some have heeded our calls and taken steps to prevent illicit activity, the lack of action by too many firms – both large and small – represents a clear and present risk to our national security.”
During his speech, Deputy Secretary Adeyemo pointed to the recent settlement between U.S. authorities and Binance as an example of the risks posed by certain cryptocurrency platforms. He alleged that Binance had been used by terrorists, drug traffickers, and individuals involved in child sexual abuse. In a strong message to those who flout legal obligations and enable criminal activities, Adeyemo asserted, “We will find you and hold you accountable.”
Calls for accountability and industry action
Adeyemo’s address underscored the need for enhanced oversight and accountability in the cryptocurrency industry, especially among non-U.S. stablecoin issuers. He called upon industry participants to recognize their obligations and take concrete steps to prevent illicit activities within their platforms. The Deputy Secretary’s remarks align with the broader efforts by U.S. authorities to regulate and monitor the growing cryptocurrency space.