Summer Myatt
The exponentially increasing use of digital currencies and cryptocurrencies worldwide has introduced a new kind of economic actor to the global stage. With hundreds of millions of users across the globe, this unregulated digital economy is rapidly expanding its footprint in the private sector, and the public sector is taking notice.
Gurvais Grigg, chief technology officer of the global public sector at blockchain data platform provider Chainalysis, said he believes cryptocurrency could initiate a revolution in how federal and industry organizations facilitate value transfer.
The former FBI Laboratory official explained some of the potential opportunities, risks and use cases surrounding digital currencies in the federal landscape during an exclusive interview with Executive Mosaic.
“Imagine if cryptocurrency and blockchain were utilized to transform traditional value transfer and government benefit payment systems, where you could make those systems more fraud and corruption resistant,” Grigg said.
Cryptocurrency uses blockchain technology to encrypt and track transactions through a distributed ledger. This immutable record of transactions allows for more robust security of these assets, as illicit transactions are more easily traceable.
Continuing his example of using cryptocurrency to deliver funds to citizens through the government benefit payment system, Grigg added, “you can guarantee that it’s going directly to one person, and you can also see if it’s being diverted or reused for other things not intended.”
However, a central authority does not issue or regulate cryptocurrencies, which raises significant security concerns for U.S. and international governments.
“People are adopting crypto because it’s liquid, it’s instantaneous and it’s cross-border,” Grigg explained. “But criminals and national security threat actors are also flocking to crypto for those very same reasons.”
According to Chainalysis’ 2022 Crypto Crime Report, illicit addresses received $14 billion in 2021, up 79 percent from the previous year, marking a new all-time high for crypto-based crime.
These digital resources, Griggs noted, can move from cooperative to uncooperative jurisdictions in a matter of moments, presenting a new set of challenges for law enforcement officials and regulatory bodies that are attempting to “follow the money” and investigate these crimes.
Another urgent factor in the conversation of digital currency adoption in the U.S. is the rapid growth of crypto in other great power competition countries. In a blog post, Grigg cited examples of cryptocurrency policy measures, legislation, cybercrimes and market economy adoption in countries like China, Russia and North Korea as pacing challenges that the U.S. should not ignore.
“As cryptocurrency takes on a more prominent role in the world’s financial system and larger segments of the population and business join the blockchain, the countries leading the way in cryptocurrency will gain greater power and influence,” Griggs wrote.
“Now is the time for the public sector to act.”
Grigg is set to moderate a panel conversation with digital currency experts and thought leaders at the Potomac Officers Club’s Digital Currency and National Security Forum on Jan. 27.
Event attendees will also hear from John “Chris” Inglis, the first national cyber director, and Marshall Billingslea, former assistant secretary for terrorist financing, during their keynote addresses on the importance of cybersecurity in the digital currency conversation.
MicroStrategy CEO Michael Saylor will join the Juan Zarate, global co-managing partner and chief strategy officer for K2 Integrity, in a dynamic discussion surrounding the future of digital assets in the global economy during the “fireside chat” portion of the program.
Click here to register for the Jan. 27 forum.
