Crypto

The UN wants to curb the rise of crypto in developing countries – CryptoActu

The United Nations Conference on Trade and Development (UNCTD) has come up with a set of recommendations to curb the pace of cryptocurrency adoption in developing countries. In three guidelines, the international organization highlights the risks, costs, and threats that cryptocurrencies pose to financial stability, the mobilization of national resources, and the security of monetary systems.

Cryptocurrency: a pernicious trend!

Created after the Second World War, the United Nations (UN), according to its charter, is intended “to maintain international peace and security, as well as to achieve international cooperation in order to solve economic, social, intellectual or humanitarian problems.” … Everything must contribute to respect for human rights and fundamental freedoms. »

Thus, one of the missions of the UN is to raise awareness of the harmful excesses of time, and from its point of view, the growing adoption of cryptocurrencies in developing countries is one of them.

While private digital currencies have enriched some people and institutions, they are a volatile financial asset that can carry social risks and costs.

UNCTD Guidance Note

Thus, in what should be called a three-part indictment, the international organization paints a rather bleak picture of the rising rise of cryptocurrencies.

The recent digital currency turmoil in the markets suggests that owning cryptocurrencies is risky. If the central bank intervenes to protect their financial stability, the issue becomes public.

UNCTD Guidance Note

Quickly mentioning their positive aspects – the efficiency of transfer of funds and their possible protective aspect against monetary inflation – the UN agency focuses rather on the dangers of their exponential use after the Covid-19 pandemic, noting in this regard that it is emerging economies that have shown the keenest interest in assets that allow they partially avoid the defeat of the failed system.

“All that glitters is not gold”

To counter this expansion, the organization has a ton of ideas, and its first policy brief, titled “All That Glitters Is Not Gold: The High Cost of Unregulated Cryptocurrencies,” sets the tone.

The goal is to make cryptocurrencies less attractive, it is about limiting their distribution by imposing strict rules, full of taxes and all sorts of bans. Prohibiting regulated financial institutions from holding them (including stablecoins), offering related products, and holding them on behalf of their clients. Increased monitoring of exchanges and digital wallets and a drastic restriction of advertising related to cryptocurrency. In addition, to take into account the decentralized, borderless and pseudonymous characteristics of cryptocurrencies, the UN proposes to limit centralized entry points to decentralized finance (DeFi). The goal is to reassert capital control against the assets that, from his point of view, developed in the second part facilitate tax evasion and illicit flows, thus punishing an already fragile economy.

While cryptocurrencies can facilitate remittances, they can also facilitate tax evasion and tax evasion through illicit flows, as if they were heading into a tax haven where ownership cannot be easily identified.

UNCTD Guidance Note

Indeed, like a growing number of regulators, she recommends a coordinated global effort by the relevant authorities to implement proper tax laws for the crypto industry. International consultations also refer to rules and exchange of information.

And in agreement with the International Monetary Fund (IMF), the organization also advocates for the development of central bank digital currencies, which should favorably replace bitcoin and others.

If cryptocurrencies continue to develop as a means of payment, even as an unofficial replacement for national currencies, the “monetary sovereignty” of countries may be threatened. (…) A national digital payment system for public services should eliminate at least some of the reasons for the use of cryptocurrencies and limit the spread of cryptocurrencies in developing countries.

UNCTD Guidance Note

The UN obeys the surrounding doxa

The accusation of the UN agency in relation to cryptography is all over the place. It does not assert or announce anything new, contenting itself with addressing the admittedly complex and substantive issues and debates that have troubled the regulatory world since they gained popularity. Faced with a phenomenon whose magnitude threatens the traditional financial order, the temple’s guardians logically fire at full speed.

Regulation

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But the UN itself needs to be a little more on the side of the people. Also, can we be surprised by the fact that this removes the question of how and why this cryptocurrency frenzy in developing countries.

It is truly amazing how the UN conference does not even recognize (let alone use) the huge humanitarian and financial benefits that cryptocurrency brings to these economies and maintain the apparent huge demand.

Patrick Hansen on Twitter

In countries where currencies are backed by, or reputed to be, solid institutions and have almost absolute public confidence, there is no need for them. On the other hand, in countries with weaker monetary infrastructure, cryptocurrencies can act as a means of protection. They also help expand access to financial services for the world’s estimated 1.7 billion unbanked. Two positive aspects, among so many others, that the UN cannot ignore, but which it suddenly passes over in silence, causing its approach to lose all credibility. Repression and infantilization of the population, one would think, having heard the words of the central banker.

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