UN Agency wants comprehensive crypto regulation in developing countries
United Nations Conference on Trade and Development (UNCTD) published Policy briefing Recommendations to discourage crypto adoption in developing countries.
UNCTD is August 10 In it, he argued that unregulated crypto adoption poses a threat to developing countries. However, he acknowledged the role of crypto as a hedge against currency inflation, facilitating remittances.
The agency’s concerns about cryptocurrencies relate to financial system stability, resource mobilization, and security in developing countries, according to the Brief.
The UN agency reiterated the position of the International Monetary Fund (IMF) on the risks of adopting cryptocurrencies as legal tender. He said recent market conditions have proven that cryptocurrencies, especially stablecoins, can undermine financial stability in developing countries.
If cryptocurrencies become widespread and unofficially replace domestic currencies (a process known as cryptography), this could jeopardize a country’s monetary sovereignty.
To protect consumers in developing countries, UNCTD recommends implementing comprehensive regulations on cryptocurrencies and limiting crypto-related advertising.
The second issue raised concerns the development of domestic digital payment systems. Failure to do so could lead to an increase in capital outflow from the real economy to the crypto economy, undermining the stability of the country’s currency, he said.
As a recommendation, the agency urged authorities to consider local development. Central Bank Digital Currency (CBDC).
Depending on the nation’s capabilities and needs, the monetary authority could offer a central bank digital currency or, more simply, a fast retail payment system.
UNCTD ultimately argued that increased adoption of cryptocurrencies will affect resource mobilization in developing countries, as cryptocurrency transactions facilitate tax evasion.
Cryptocurrencies can facilitate money transfers, but they also have the potential to enable tax evasion and evasion through illicit flows, such as to tax havens where the owner cannot be easily identified.
To curb tax evasion using cryptocurrencies, the agency recommends a globally coordinated effort among relevant authorities to implement appropriate tax laws for the crypto industry.
Developing Countries Continue to Work on Crypto Adoption
In 2021, Nigeria showed the highest crypto adoption with a global crypto growth of 880% that year.
The Central African Republic (CAR) became the first African country to adopt Bitcoin as its currency. Legal tender We stepped up our commitment to cryptocurrency adoption by launching “Project Sango” and launching a native Sango Coin sale on July 25th.
