The United Nations (UN) recently said that crypto is a threat to developing nations. It said that the use of cryptocurrencies is harmful to the monetary sovereignty of the country. Developing countries will find it difficult to collect taxes, and they will not have the power over the currency their citizens use. The word ‘sovereignty’ means ‘supreme power or authority. So, the UN saying that countries won’t have it means they understand how much ordinary citizens lack power now.
The UN is not fond of crypto
Calling crypto a threat is a big statement and is also quite the opposite of what they said a while back. The UN found the ease of sending remittances across borders using crypto a positive thing for developing nations. But they also think its use will undermine the economy. Right now, the highest percentage of crypto ownership is in Ukraine, with 12.7%. It is followed by Russia and Venezuela, with 11.9% and 10.3% ownership. The data shows that among the top 3 countries, one is a developing nation and the other is a 3rd world country with super-high inflation.
As users, what compels us to use crypto is the lack of any 3rd parties involved. It means we are in control of the transactions. However, for the authorities, that is a negative thing. In fact, the UN says that the lack of a 3rd party means users cannot be pushed to report. Plus, developing countries do not have enough regulations that will push companies to follow the rules.
Recommendations by UN
First of all, developing nations need to define the rules and regulations of cryptocurrency in their country. Secondly, implementing a tax structure that is followed globally could make it easier to collect. They will also be able to easily catch evaders. The UN also recommends imposing high taxes on crypto because of their negative impact. This will discourage investors from investing in cryptocurrencies and holding them.
The statements made by the UN show two things. First, they are quite skeptical about crypto and its benefits. And secondly, they also fear that countries will lose their control over their citizens once they lose control over the currency.
What are your thoughts as the UN says that crypto is a threat to developing economies? And do you think this is because they fear losing control? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.