27th Parliamentary-Intelligence Security Forum – Implications of Blockchain for National Security: CBDCS, Decentralized Networks and Macroeconomic Competition
Ms. Carole N House shared her perspective on the intersection of technology, finance, and national security, emphasizing both the risks and opportunities posed by cryptocurrencies and blockchain. Drawing from her experience in the Army and across the White House, Treasury, and intelligence communities, she highlighted that technology itself is neutral; its impact depends on design, regulation, and operational controls.
Key points from her remarks include:
- Cryptocurrency and illicit finance: North Korean and Russian actors are using cryptocurrency to fund proliferation and evade sanctions. Ransomware, investment fraud, and other cybercrime exploit gaps in regulation and enforcement—not the technology itself.
- Responsible innovation: Emerging technologies like blockchain, central bank digital currencies, and programmable money can strengthen economies and national security if implemented with proper safeguards, regulatory frameworks, and industry partnerships.
- Transparency vs. privacy trade-offs: Blockchain’s immutable ledger allows unprecedented transparency for auditing and investigations, but public exposure of financial data could create consumer and national security risks.
- Economic and national security link: Maintaining the US dollar’s central role in global finance supports sanctions, anti-money laundering, and broader national security goals. Competing systems or decentralized finance could weaken these levers if not properly managed.
- Policy and industry collaboration: Ensuring cybersecurity, promoting privacy-enhancing technologies, and establishing standards are critical for both innovation and risk mitigation. A whole-of-nation approach is required to balance fostering technological growth with defending against financial crime and threats to national security.
Her overarching message: cryptocurrencies and digital innovations are tools whose benefits can be harnessed but only through responsible design, regulation, and collaboration between government and industry.
