Unloved Bitcoin – United Nations Wants To Ban Crypto From Banks

Bitcoin and forbidden cryptos Bitcoin and cryptocurrencies are often pointed out, wrongly. Mistreated by regulation, repudiated even by certain institutions, the fact remains that its adoption is gradually gaining ground. A safe haven, a weapon against inflation or even a means of circumventing international financial sanctions, emerging or 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 alarms about the use of cryptocurrencies by banks in emerging countries.

UNCTAD works on Bitcoin and cryptocurrencies

UNCTAD has thus published three reports between June and August 2022, on the use of cryptocurrencies around the world. The first report entitled All That Glitters Isn’t Gold: The High Cost of Unregulated Cryptocurrencies » therefore examines the impact of cryptocurrencies on emerging economies expressly advising the establishment of MNBC, Digital Currencies of Central Banks.

The second text titled Public Payment Systems in the Digital Age: Responding to Financial Stability and Security Risks of Cryptocurrencies » develops and proposes solutions to quickly apply MNBC in developing countries.

Finally, the last report making 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 UN body, the possession of cryptocurrency from a banking organization can be an instability for a country, the consequences can be disastrous if it is emerging.

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No crypto for banks according to UNCTAD

The institution then puts forward the argument of an increasing use of cryptocurrencies for domestic payments. Transfers of funds thus become a risk of financial instability. Emerging countries would run the risk of seeing their citizens’ capital flee. Particular concern is pointed out to developing countries, recommendations are even made to them:

  • Introduction of generalized restrictions on the use of cryptocurrencies;
  • implementation of a strict monetary policy to promote financial stability;
  • prohibition for banks to own cryptocurrencies;
  • higher taxes on cryptocurrency transactions;
  • require exchanges and wallets to register with regulators;
  • limit or prohibit crypto advertising.

In other words, the institution wishes beyond regulation for emerging countries:

“Rethink capital controls to account for 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 surely necessary in the face of the resurgence of hahks, scams and other incidents that can undermine consumer confidence in the ecosystem, and thus slow down or even prevent its development.

Nevertheless, some real examples underline the limits of such regulation. The gathering of central banks led by Nayib Bukele in El Salvador is a striking example.

It is the same for the associations present in numbers on the African continent. They establish Bitcoin and cryptocurrencies in emerging countries. In fact, they allow the education of populations to decentralized finance, the limitation of intermediaries and facilitating financial inclusion.

Global financial watchdogs are constantly advising and regulating cryptocurrencies attacking the decentralization and anonymity. The objective here remains worrying. It is driven by the obsession of maintaining the global financial order as it is right now, thus negating the rise of decentralized finance enabled by the blockchain. However, she was able to show her virtues.

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