UN trade body calls for halting cryptocurrency rise in developing countries
Although private digital currencies have rewarded some individuals and institutions, they are unstable financial asset that can bring social risks and costs, the agency warned. UNCTAD said their benefits to some are overshadowed by the threats they pose to financial stability, domestic resource mobilization, and the security of monetary systems. Cryptocurrencies are an alternative form of payment. Transactions are done digitally through encrypted technology known as blockchain. The use of cryptocurrency rose globally at an unprecedented rate during the COVID-19 pandemic, reinforcing a trend that was already in motion. Some 19,000 are currently in existence. In 2021, developing countries accounted for 15 of the top 20 economies when it comes to the share of the population that owns cryptocurrencies. Ukraine topped the list with 12.7 percent, followed by Russia and Venezuela, with 11.9 percent and 10.3 percent, respectively. The first brief – All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated – examines the reasons behind the rapid uptake of cryptocurrencies in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks.