The man who helped invent the financial embargoes that cut off terrorist funding after 9/11 is concerned that cryptocurrencies could be used to undermine his creations.

A former deputy assistant to U.S. President George W. Bush, and a former deputy national security advisor for combating terrorism, Juan Zarate is widely credited with helping create sanctions tools and financial instruments that put pressure on enemies of the state. But as blockchain technology begins to break down borders and empower the unbanked, Zarate is growing concerned it might also be weaponized to illicit ends.

Zarate told CoinDesk:

To be clear, Zarate supports the idea that blockchain and cryptocurrencies could give "greater autonomy" to individuals, while potentially boosting "commercial activity."

Now a senior adviser at Washington D.C.-based think tank, Center for Strategic and International Studies (CSIS) and chairman of the Financial Integrity Network, Zarate was also among the technology's earliest advocates, having been an advisor to U.S. cryptocurrency exchange Coinbase since 2014.

Still, he's adamant there needs to be more transparency about how even governments might use blockchain due to the geo-political nature of the monetary system it could help reimagine.

Key to the success of the tools Zarate created, for example, was the U.S. dollar's status as the de facto global reserve currency. By creating ways to strategically cut off a nation's access to the dollar, Zarate was able to effectively restrict their ability to wage war or otherwise undermine U.S. interests.

In his 2013 book, "Treasury's War: The Unleashing of a New Era of Financial Warfare," Zarate wrote a detailed account of these tools, but also ended with a stark warning about what he called the "coming financial wars," in which the tools he helped create might be used against his own country.

And even though he identifies as a blockchain advocate, in interview, he outlined multiple examples of how state actors are already experimenting with the technology for illicit uses, in the process painting a vivid picture of what could go wrong.

To date, the largest and most real threat of blockchain is its ability to help nation-states evade sanctions, according to Zarate.

Already, a Swedish startup has been granted a business license to build an infrastructure explicitly designed to help countries evade potential sanctions, with the stated goal of giving investors the ability to back "good, hard-working companies and individuals" in Iran.

Most recently, multiple reports by cybersecurity firms indicated that North Korea was amassing a "war-chest" of bitcoin to evade sanctions. Later, a South Korea official formally accused North Korea of stealing cryptocurrency worth "billions of won."

Indeed, Iran's own temporary sanctions relief has been recently called into question by U.S. President Donald Trump, who last month expanded what are considered strict sanctions against North Korea.

Zarate didn't comment specifically on the potential impact of such sanctions for the number of startups that have launched and are using blockchain solutions as a way to simplify international investment.

Still, he struck a perhaps forboding tone about what he sees as their possibly misguided intents.

Zarate said:

And Zarate sees a wide range of potential risks.

Since much of the success of Zarate's sanctions tools relied on the influence of the U.S. dollar as a global standard, anything that undermines that influence could undermine the tools.

Simply put, the possible threat is that value from state-backed fiat currencies could be siphoned off into cryptocurrencies that aren't technically limited by any borders, thereby undermining the issuers' ability to influence monetary policy.

While the president of the Federal Reserve Bank of Philadelphia has said it is unlikely that cryptocurrency would ever impact that ability, central banks and lawmakers around the world are still exploring or seeking to explore this theory.

And though much of that work appears to be benign in nature, other central banks with a history of corruption allegations are also seeking out use cases.

It is, of course, possible that these banks are merely exploring cryptocurrencies as a way to increase transparency and perhaps expand the trust of the international community. But one, Venezuela, plans to launch an oil-backed cryptocurrency, and it has already come out with the overt objective of circumventing "financial blockades."

"We have to be very conscious of the fact that there are actors in the system, both state and non-state that may be willing to disrupt that system," said Zarate. "They may be willing to use new technologies to actually undermine those very systems to affect the U.S. economy and to affect other economies, and frankly, even to profit from it."

If Zarate has one message then, it's perhaps a warning about possible unforeseen consequences of the technology.

Already this week, U.S. lawmakers appear to be growing concerned about the possibilities, too, having convened representatives from the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) to answer questions on the issue in Washington, D.C.

Unsurprisingly, questions at the event focused on financial stability. And while both the heads of the CFTC and the SEC indicated they see cryptocurrencies as a low risk, they acknowledged this was likely due to the nascent state of the market.

Zarate draws a similar conclusion, but is perhaps more focused on what happens when that variable changes, and blockchains and cryptocurrencies aren't so academic anymore.

"I'm incredibly optimistic about these technologies, but having witnessed failures in the past of regulation and recognition of risk, and cascading risk, I want to make sure that with adoption comes evaluation of where those risks lie," said Zarate, concluding:

Juan Zarate image via Financial Integrity Network