Developing countries may have less room to manoeuvre, yet the regulation of cryptocurrencies is possible. The following policies, among others, have the potential to curb the further spread of the risks of cryptocurrencies and stablecoins:
(a) Ensuring comprehensive financial regulation, through the following actions:
Require the mandatory registration of crypto-exchanges and digital wallets and make the use of cryptocurrencies less attractive, for example by charging entry fees for crypto-exchanges and digital wallets and/or imposing financial transaction taxes on cryptocurrency trading;
Ban regulated financial institutions from holding stablecoins and cryptocurrencies or offering related products to clients;
Regulate decentralized finance (such finance may, in fact, not be fully decentralized, given its central management and ownership, which form an entry point for regulation18);
(b) Restricting or prohibiting the advertisement of crypto-exchanges and digital wallets in public spaces and on social media. This new type of virtual, and often disguised, advertisement requires policymakers to expand the scope of regulation beyond traditional media. This is an urgent need in terms of consumer protection in countries with low levels of financial literacy, as even limited exposure to cryptocurrencies may lead to significant losses;
(c) Creating a public payment system to serve as a public good, such as a central bank digital currency. In the light of the regulatory and technological complexity of central bank digital currencies and the urgent need to provide safe, reliable and affordable payment systems, authorities could also examine other possibilities, including fast retail payment systems.
To improve taxpayer compliance rates and combat tax evasion, tax authorities should clearly define the legal status of cryptocurrencies and require cryptoexchanges, e-wallet providers and DeFi platforms to report gross inflows and outflows on all business and personal accounts.
Given the fast-evolving nature of cryptocurrencies and their ecosystem, countries urgently need to agree and implement a global tax cryptocurrency regulation that considers the needs and challenges of developing countries and gives them adequate representation.
Apart from global tax coordination, a comprehensive system of information sharing on cryptocurrency holding and trading is necessary, such as through a common reporting standard. Such measures would support countries to detect evasion of capital controls and enforce taxes.
These three recommended policies are also crucial to the effectiveness of two other initiatives:
Although cryptocurrencies may facilitate remittances, given the negative socioeconomic impact these private digital currencies bring about, countries should consider imposing higher taxes on them in comparison to other financial assets to discourage holding and transacting cryptocurrencies.
Countries should redesign their capital controls to include flows channelled through cryptocurrencies. Alternatives include imposing financial tax on cryptocurrency trading and limiting the amount of individual transactions on cryptoexchanges. Moreover, central bank digital currencies could be designed to allow for the functioning of capital controls. Without adapting to new digital alternatives, the effectiveness of these controls may be undermined.
The article makes it seem like the UN's mostly concerned about destabilizing/dethroning the central banks in these countries.
Such private digital currencies have become particularly prevalent in developing countries, entailing considerable risks and costs regarding national monetary sovereignty, policy space and macroeconomic stability.
Further, it seems like the UN is much more concerned with the geopolitical stability of developing countries than the freedom/well-being of the people living there.
Kinda makes sense where they're coming from, but the recommendations they give are egregious.
Seriously, what have they achieved recently? Not sure why anyone cares about their opinions, feels like another outdated institution that takes a lot of tax money to do nothing.
They're the western civil organization (in theory) that is also tied up with military engagements and realpolitik of all the nation states involved. Murray Rothbard, the libertarian economist, at one point suggested nationalizing their land and selling it off for revenue to private bidders lol.
I have mixed feelings about this. It was only a matter of time and I'm not surprised. Paradoxically, it will slow down Bitcoin adoption in the areas of the world that need it most.
In Africa, Crypto is completely unregulated and very bad actors are taking advantage of the situation to lure poor people into a new form of gambling addiction.
Exchanges like binance, to remain financially viable, and also because of greed, are pushing shitcoins into people. It's really bad and it won't end well, one way or the other. You have to be a retard to still think that NFTs, “DeFi”, Metaverse, smart contacts etc are going to lift a whole continent out of poverty.
Crypto is the perpetuation of the fiat world, and bitcoin's worst enemy. Paradoxically, bitcoin enabled crypto.
On the other hand, they understand that CBDCs (they are coming!) would have no chance in an environment where Bitcoin is allowed to thrive, so they take advantage of the current mess with crypto to ban everything and make it easier for CBDCs' adoption.
"Creating a public payment system to serve as a public good, such as a central bank digital currency. In the light of the regulatory and technological complexity of central bank digital currencies and the urgent need to provide safe, reliable and affordable payment systems, authorities could also examine other possibilities, including fast retail payment systems.
UN “Policy Recommendations”