In three policy briefs, the UN trade and development body, UNCTAD, has called for action to curb cryptocurrencies in developing nations.
The UN notes that in 2021, developing countries accounted for 15 of the top 20 economies when it comes to the share of the population that owns cryptocurrencies.
Policy Brief No. 100
The first brief All that glitters is not gold: The high cost of leaving cryptocurrencies unregulated, examines the reasons for this rapid uptake of cryptocurrencies use in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks. The brief also outlines the potential impacts cryptocurrencies can have on developing countries’ financial stability and monetary sovereignty.
Policy Brief No. 101
The second policy brief, Public payment systems in the digital era: Responding to the financial stability and security-related risks of cryptocurrencies, focuses in more detail on the implications of cryptocurrencies for the stability and security of monetary systems, and for financial stability in general. It notes that a domestic digital payment system that serves as a public good could fulfil at least some of the reasons for crypto use and as such limit the expansion of cryptocurrencies in developing countries.
Policy Brief No. 102
The third, The cost of doing too little too late: How cryptocurrencies can undermine domestic resource mobilization in developing countries, discusses how cryptocurrencies have become a new channel for undermining domestic resource mobilisation in developing countries. UNCTAD warns that cryptocurrencies may also enable tax evasion and avoidance through illicit financial flows – similar to a tax haven, where ownership is not easily identifiable.