Bitcoin and banned cryptocurrencies – Bitcoin and cryptocurrencies they are often highlighted incorrectly. Harassed by regulations, rejected even by certain institutions, the fact remains that hers adoption is gradually gaining momentum. A safe haven, a weapon against inflation or even a means of circumventing international financial sanctions, emerging and developing countries see it as an opportunity for growth. In this context, the United Nations Conference on Trade and Development (UNCTAD) points the finger at this progress. The organization even raises the alarm about the use of cryptocurrencies by banks in developing countries.
UNCTAD is working on Bitcoin and cryptocurrencies
UNCTAD thus published three reports between June and August 2022 on the use of cryptocurrencies around the world. The first report under the title ” All that glitters is not gold: The high cost of unregulated cryptocurrencies » therefore examines the impact of cryptocurrencies on developing economies, specifically advising the establishment of MNBCs, central bank digital currencies.
Another text entitled Public Payment Systems in the Digital Age: Responding to the Financial Stability and Security Risks of Cryptocurrencies » develops and proposes solutions for rapid implementation of MNBC in developing countries.
Finally, the last report that makes up this triptych was published last Thursday. Focusing on the banking system, the report The Cost of Doing Too Little Too Late: How Cryptocurrencies Can Undermine Domestic Resource Mobilization in Developing Countries explains how, according to the data of the UN body, owning cryptocurrency from a banking organization can be instability for the country, the consequences can be catastrophic if it occurs.
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No cryptocurrencies for banks according to UNCTAD
The institution then makes an argument about the increasing use of cryptocurrencies for domestic payments. Fund transfers thus become a risk of financial instability. Emerging countries would risk seeing their citizens’ capital flee. Special concern is pointed out to developing countries, even recommendations are given to them:
- Introducing generalized restrictions on the use of cryptocurrencies;
- implementing a strict monetary policy to improve financial stability;
- banning banks from owning cryptocurrencies;
- higher taxes on cryptocurrency transactions;
- require exchanges and wallets to register with regulators;
- limit or prohibit crypto advertising.
In other words, the institution wants beyond regulation for developing countries:
“Rethink capital controls to take into account the decentralized, borderless and pseudonymous characteristics of cryptocurrencies. »
Could Bitcoin not be an opportunity for emerging countries?
We do not pretend to answer this question. However, some examples may raise questions about the relevance of these reports. A legal framework is certainly necessary in the face of re-emergence hahaks, scams and other incidents that can undermine consumer confidence in the ecosystem and thus slow down or even prevent its development.
However, some real examples highlight the limits of such regulation. A set of central banks led Nayib Bukele in El Salvador is a striking example.
It is the same with the associations that are numerously present on the African continent. They establish Bitcoin and cryptocurrencies in developing countries. In fact, they enable the education of the population about decentralized finance, limiting middlemen and facilitating financial inclusion.
Global financial watchdogs constantly advise and regulate attacking cryptocurrencies decentralization and anonymity. Here the goal remains a concern. It is driven by an obsession with maintaining the global financial order as it currently stands, thereby negating the rise of blockchain-enabled decentralized finance. However, she managed to show her virtues.
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