A report has been released showing that nations are embracing cryptocurrencies not as mere experiments, but as core strategic assets. While authoritarian and democratic nations have differing approaches, both are using blockchain to strengthen their national strategic leadership.
A recent report by blockchain analytics firm TRM Labs revealed that countries ranging from North Korea to Singapore are actively utilizing digital assets as economic and security tools. This analysis suggests that cryptocurrencies are moving from the periphery to the center of national policy.
Borderless Blockchain: Weaponizing Authoritarian States
TRM noted that authoritarian states are particularly actively utilizing decentralized blockchain technology because it can bypass existing financial systems such as SWIFT, the US dollar, and global banking networks.
North Korea is a prime example. TRM revealed that hacking groups organized by the North Korean government were responsible for hacking exchanges, DeFi (Decentralized Finance), and bridges worth billions of dollars (trillions of won), including the Bybit hack in February of last year. They laundered the stolen funds through mixers and various blockchains, converted them into stablecoins, and then cashed them out on over-the-counter markets in Asia. Ultimately, these funds were reinvested in Pyongyang's missile and nuclear development programs.
Russia has chosen a more diversified path. Since becoming a target of full-scale sanctions following its invasion of Ukraine in 2022, digital assets have been used as a means of securing foreign currency independent of Western financial networks, including for cross-border payments, financing pro-Russian groups, and large-scale energy-based mining.
The report also assessed that Iran, which legalized Bitcoin (BTC) mining in 2019, is effectively circumventing financial sanctions from the United States and the international community by using domestically mined coins to pay for imports.
Developed countries focus on strengthening regulations and transparency.
TRM points out that democratic countries have adopted a completely different approach to utilizing digital assets. The US and Europe are focusing on various regulations and technological developments to make cryptocurrencies regulated within the financial system, rather than "blank assets."
Europe has already imposed comprehensive licensing and oversight requirements on cryptocurrency companies through its MiCA regulatory framework. In the United States, major organizations such as FinCEN, OFAC, and the FBI are actively adopting cryptocurrency analysis systems and promoting regulatory reform to track ransom payments and enforce sanctions.
In Asia, Singapore is partnering with private companies to establish a regulatory technology foundation, while Japan, reflecting on past hacking incidents, is strengthening exchange oversight. Furthermore, central banks in several Asian countries are experimenting with technologies such as central bank digital currencies (CBDCs) and tokenized reserves, leveraging the advantages of public blockchains while maintaining government control.
Cryptocurrency: The Duality of a Geopolitical Weapon
TRM emphasizes the public and traceable nature of blockchain-based transactions, analyzing that the difference lies in the power of "viewing." Ultimately, this transparency cannot be utilized without strong analytical capabilities and international cooperation, which will continue to widen the gap between authoritarian and democratic states.
The report concluded by emphasizing that authoritarian states use digital assets as a "circumvention" to avoid sanctions, while democratic states treat them as a "tool" for transparency. As digital assets mature, the "divergence" between these strategies is expected to become more pronounced.
๐ Market Interpretation
Cryptocurrencies have now become a central asset in national financial strategies, and countries are leveraging digital assets to serve their own political and security objectives.
๐ก Strategy Points
It's crucial for both investors and regulators to understand the "intention" and "structure" of cryptocurrency use. While blockchain technology is the same, how it's handled can lead to drastically different outcomes.
๐ Glossary
- Mixer: A technology that mixes cryptocurrency funds to make it difficult to track their flow.
- OTC (over-the-counter trading): A method of trading assets through informal channels rather than the open market.
- MiCA: The European Union's Cryptocurrency Market Regulatory Framework
CBDC: Central Bank Digital Currency. A digital legal tender issued by the government.
๐ก Want to know more? AI-prepared questions for you:
A. In the past, cryptocurrencies were used only in the private sector, but now governments are using them as financial or security strategy tools.
A. After making it difficult to track through mixers and various blockchain networks, they are cashed out through Asian OTC brokers and used for military purposes such as nuclear development.
A. It aims to increase market trust by ensuring transparency, protecting consumers, and tracking illegal funds.
A. While democratic countries prioritize the rule of law and public oversight, authoritarian states prioritize evading sanctions and strengthening control mechanisms. This is why, even though the technology is the same, its intended use differs.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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