The United Nations Conference on Trade and Development (UNCTAD) believes that the impact of cryptocurrencies in developing countries should be limited. According to the agency, digital assets are unstable financial products that could cause further problems for already struggling economies.
Amid the global currency crisis, many emerging market residents have decided to convert their depreciating fiat currencies into stablecoins. However, UNCTAD warned that such tokens also pose risks and individuals should avoid them.
- Several surveys have found that cryptocurrencies in countries where local populations are high inflation, financial crises or even military conflicts are more common. In one of the youngest announcementsUNCTAD claimed that digital asset adoption is highest in war-torn Ukraine.
- Almost 13% of residents there have invested some of their wealth in cryptocurrencies. Surprisingly, the second place belongs to its military rival – Russia (11.9%).
- The agency claims that investing in Bitcoin or altcoins could be the wrong strategy, especially for emerging market citizens. This is due to the notorious volatility of the asset class.
“If cryptocurrencies become a widely used means of payment, even unofficially replacing domestic currencies (a process called cryptoization), it could endanger the monetary sovereignty of countries,” according to UNCTAD.
- It is certain that cryptocurrencies have attracted attention in recent years (especially during the 2021 bull market).
- Ironically, the United Nations agency argued that “all that glitters is not gold” and warned investors to steer clear of such attractive but potentially dangerous investments.
- The organization went on to explain that stablecoins carry the same risks and that investors should be extremely careful when dealing with them.
Source: Crypto News Deutsch