A recent policy brief from the United Nations recommends that developing nations take action against crypto.
In the document titled “All that glitters is not gold,” first published in June, the United Nations Conference on Trade and Development (UNCTAD) stated the disadvantages posed to these nations by cryptocurrencies far outweigh the benefits they may bring to individuals and financial institutions.
And the document goes as far as to suggest developing nations require the mandatory registration of all crypto wallets and ban advertisements related to cryptocurrencies.
The UN cautioned cryptocurrencies could threaten the financial stability of developing nations, enable illicit financial activity, prevent authorities from limiting the flow of capital, and also jeopardize the monetary sovereignty of nations by unofficially replacing domestic currencies.
The brief recommended governments “make the use of cryptocurrencies less attractive” by imposing taxes on transactions using the technology and requiring the mandatory registration of digital wallets and cryptocurrency exchanges.
Developing nations should restrict or prohibit advertising from crypto companies in public places or on social media platforms, the conference proposed as well.
The brief’s final piece of advice is for nations to develop their own payment systems that would serve as a public good, much in the same way government-built infrastructure does, and explore the creation of a central bank digital currency (CBDC).
CBDCs are a digitized form of fiat money issued by public monetary authorities. While some CBDCs function in the same way as cryptocurrencies, they are issued by governments and its value is backed by them.
