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The existing system of international financial sanctions against national currencies would not work against Bitcoin

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It is perfectly possible, and actually quite easy, to impose international financial sanctions on a fiat currency such as the Russian Ruble or the Iranian Rial. All you need to do, is to block messages for these currencies on the SWIFT network.

It is not possible to impose financial sanctions on Bitcoin (or any other cryptocurrency). As long as users can download a Bitcoin wallet, these users will be able to send and receive bitcoins.

The reason why international financial sanctions are possible, and even quite effective, against fiat currencies, is because the local authorities for a fiat currency can prevent users from opening a bank account for it Opening a bank account for a fiat currency is the equivalent of downloading a wallet for Bitcoin (or another cryptocurrency).

For example, why do you even need to SWIFT network to send or receive Iranian rial from outside Iran?

Answer: the SWIFT network is necessary, because users outside Iran are not allowed, by the Iranian authorities themselves, to open a bank account for Iranian Rial. Otherwise, users would not even need the SWIFT network. In other words, the SWIFT network only exists for regulatory reasons.

Hence, when Iran or Russia complain about international financial sanctions, and the negative effect that they have on their economies, take that with a big grain of salt. It is these countries themselves that are instrumental in enforcing these sanctions, by preventing foreign users from (remotely) opening bank accounts in their country.

In other words, without a gigantic dose of rampant stupidity by the Russian and Iranian authorities, international financial sanctions against Russia or Iran could not possibly even work. These countries happily regulate themselves into oblivion.

submitted by /u/mimblezimble
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