Skip to content
New work from the UN’s UNCTAD, a body set up to promote the interests of developing states in world trade, says that while the advent of cryptocurrencies has helped many consumers in developing economies access new markets and products, it has also put them at massive risk of fraud – and made them subject to the volatility inherent in many private cryptocurrencies.
UN pro regulation on crypto
Meanwhile, a separate study from CapGemini claims that “private”, or, “classic” crypto systems will eventually merge into a new financial system that blends traditional and so-called “decentralised finance”, or DeFi.
In both cases, the authors are calling on enterprises and governments to embrace the opportunities afforded by more regulation – including reduced risk and greater accountability.
They also say – mirroring the landmark study by East & Partners and Payments Cards & Mobile – that business and government should be doing more to prepare for a fully digital future.
UNCTAD’s study, “The cost of doing too little too late: How cryptocurrencies can undermine domestic resource mobilization in developing countries”, focuses on the benefits of moving from a “free” decentralised crypto system to a public, national Central Bank Digital Currency (CBDC) environment and calls on governments and regulators to press on with the development of these instruments.
“Two new studies note the opportunity and risks already seen in crypto, and argue for CBDCs as a solution.”
However, CapGemini’s “Decentralised Futures” foresees convergence between “classic” cryptocurrencies and the CBDCs of the future.
They predict an emerging equilibrium between cryptocurrencies used chiefly as a means of investment and CBDCs, which they say will serve as mediums for payment and exchange.
In particular, they expect international currency exchange mechanisms and capital markets to undergo a revolution with the introduction of CBDCs.
Going against the grain of current market experience, they predict both crypto and NFTs will be more widely held and used in the future – and say businesses should be doing more to evaluate their future strategy for CBDCs and crypto.
They also argue in favour of collaborative activities between established corporates and emerging “DeFi” players.
In both cases, these reports acknowledge both the damage done and the opportunities available to consumers in emerging markets – and conclude that more regulation is required to avoid risks to financial stability from crypto.
Interestingly, both studies conclude that CBDCs will provide much of the stability, risk reduction and accountability major corporates are looking for before they get fully involved in the “DeFi” universe.
The post UN pro regulation on crypto – CapGemini sees convergence appeared first on Payments Cards & Mobile.
