UN Says Developing Nations Should Ban Bitcoin Ads, Regulate Crypto Wallets
The UN believes crypto could threaten the monetary sovereignty of developing nations, and it's recommending strict rules to curtail their use.
A recently published policy brief from the United Nations recommended developing nations take action against crypto, warning of risks associated with leaving the industry unregulated.
In the document titled “All that glitters is not gold,” first published in June, the United Nations Conference on Trade and Development (UNCTAD) stated the disadvantages posed to these nations by cryptocurrencies far outweigh the benefits they may bring to individuals and financial institutions.
And the document goes as far as to suggest developing nations require the mandatory registration of all crypto wallets and ban advertisements related to cryptocurrencies.
“This is not about approving or disapproving [of crypto] but pointing out that there are social risks and costs associated with cryptocurrency,” Penelope Hawkins, an economist and senior economic affairs officer at UNCTAD told Decrypt. “This is a recommendation that applies to any speculative or high-risk financial products where returns are uncertain.”
The intergovernmental organization cautioned cryptocurrencies could threaten the financial stability of developing nations, enable illicit financial activity, prevent authorities from limiting the flow of capital, and also jeopardize the monetary sovereignty of nations by unofficially replacing domestic currencies.
The brief recommended governments “make the use of cryptocurrencies less attractive” by imposing taxes on transactions using the technology and requiring the mandatory registration of digital wallets and cryptocurrency exchanges. It also put forth the idea of banning financial institutions from holding digital assets and preventing them from offering crypto-related services to clients.
Developing nations should restrict or prohibit advertising from crypto companies in public places or on social media platforms, the conference proposed as well, claiming it’s an “urgent need in terms of consumer protection in countries with low levels of financial literacy” that could lead to “significant losses,” according to the policy brief.
Rohan Grey, a law professor at the Willamette University College of Law, has worked as a consultant for the United Nations on digital currencies and said the lack of regulation regarding cryptocurrencies has a documented history of hurting consumers by enabling fraud and scams.
“The ecosystem is not fully ripe and mature,” he told Decrypt. “Allowing [the industry] to aggressively market itself would be like having a new kind of drug that hasn't even gone through the FDA process trumpeting itself as solving cancer.”
https://decrypt.co/105013/un-developing-nations-bitcoin-ads-crypto-wallets