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Sanctions and sanctions-resistant money

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  • Hendrickson, Joshua R.
  • Warmke, Craig

Abstract

In recent years, dollar-based sanctions have become an important tool of U.S. foreign policy. The introduction of bitcoin poses challenges to this sanctions regime. Bitcoin settles transactions through a decentralized, global, permissionless, and competitive market. These characteristics create a degree of censorship resistance. As bitcoin adoption increases, policymakers intent on maintaining the status quo might try to target the bitcoin network for censorship as well. We examine two recent proposals aimed at censoring transactions involving sanctioned entities and assess their likelihood of success. We argue that both proposals are unlikely to achieve their intended outcomes. Instead, a more pragmatic approach to bitcoin is likely to be more effective for those focused on sanctions compliance and enforcement.

Suggested Citation

  • Hendrickson, Joshua R. & Warmke, Craig, 2026. "Sanctions and sanctions-resistant money," Journal of Economic Behavior & Organization, Elsevier, vol. 245(C).
    • Handle: RePEc:eee:jeborg:v:245:y:2026:i:c:s0167268126000855
    DOI: 10.1016/j.jebo.2026.107499
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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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