Crypto News

UN urges developing countries to limit cryptocurrency adoption as it poses risks to financial and social stability

An intergovernmental United Nations (UN) body set up to advance the interests of developing countries is calling on emerging economies to cryptocurrencies to restrict.
The United Nations Conference on Trade and Development (UNCTD) warns that the adoption of cryptocurrencies in developing countries can threaten financial stability, domestic resource mobilization and the security of monetary systems.

“While these private digital currencies have rewarded some and facilitate remittances, they are an unstable financial asset that can also pose social risks and costs.”

Citing the three policy briefs it has issued that address the growing popularity of digital assets and their risks, the organization states that owning cryptocurrencies can lead to financial losses.

UNCTD says digital assets can also threaten the monetary sovereignty of countries once their use as a means of payment and as an unofficial national currency is more widespread, and says stablecoins pose risks for developing countries, particularly those with unmet needs for reserve currencies.

“Given the risk of widening the digital divide in the developing world, UNCTAD urges authorities to maintain cash issuance and distribution.”

The UNCTD says that cryptocurrencies can also enable tax evasion since the owners of digital assets are not easily identified.

“In this way, cryptocurrencies can also limit the effectiveness of capital controls, an important tool for developing countries to preserve their policy space and macroeconomic stability.”

The panel urges authorities to take policy action to curb the widespread adoption of cryptocurrencies in developing countries.

These include regulating digital asset platforms, restricting cryptocurrency advertising, adopting digital payment systems, reviewing cryptocurrency tax policies, and revising capital controls to reflect the decentralized and pseudonymous nature of digital assets.

Featured Image: Shutterstock/Warm_Tail

Source: Crypto News Deutsch

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button