Daleep Singh, a former deputy national security advisor for international economics for the United States, stated during a Senate Banking Committee hearing on February 28, 2023, that the creation of a Central Bank Digital Currency (CBDC) would have a significant impact on the country’s crypto sector.
The hearing was on “Advancing National Security and Foreign Policy Through Sanctions, Export Controls, and Other Economic Tools”. Senator Elizabeth Warren opened the discussion by addressing the ongoing ransomware attacks and the exposure of American citizens’ data. She also explained the damage that these attacks had done to the US Marshall Service.
Singh noted that these attacks were possible because of cryptocurrencies, as 100% of them were paid through crypto tokens. The majority of these attacks came from Russia, Iran, and North Korea, and they posed a threat to national security while also enabling other countries to evade US sanctions.
According to cybersecurity firm Emsisofti, more than 200 government, education, and healthcare organizations in the US were victims of ransomware in 2022.
Singh stated that regulating digital assets and creating a digital dollar would help crowd out the crypto ecosystem, making their vulnerabilities less prone to exploitation.
The US has been working on regulating digital assets for some time. A regulatory framework for developing a digital dollar was recently published in response to the crash of crypto firms and the illicit use of digital assets.
Other countries, such as China and India, have also implemented the use of digital currencies to facilitate lower transaction fees, quicker interactions between consumers, and to prevent financial crimes in the country.
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