Is it possible to effectively sanction cryptocurrency?
It’s not clear what will happen when cryptocurrency becomes a mainstream method of payment and we’re simply unable to impose certain sanctions on an aggressor nation.
The EU and US did a fairly good job in terms of sanctioning, not the blockchain piece, but regular payments through the SWIFT banking system, although there was initial resistance to that. Russia’s Central Bank reserves that are outside of the United States have been frozen, so the traditional payment network accommodated the sanctions. The payments around their oil and gas sales have not been sanctioned, so that is continuing, but that's a conscious decision on the part of NATO, the EU and United States.
As a counter example, the US government has a requirement that if you fly with over $10K worth of cash or assets, you have to declare it. But if I've memorized my seed key, there’s a big debate over whether I have to declare that. It’s bizarre because I'm not actually traveling with the money, I'm traveling with the knowledge that can get me to the money, so it is a totally different world and ecosystem.