The United Nations Conference on Trade and Development (UNCTAD) has urged limits on cryptocurrencies across developing nations, in a series of policy briefs released on Wednesday.

See related article: IMF says crypto crash hasn’t quite harmed broader financial system

Fast facts

  • The UNCTAD, part of the UN Secretariat, said cryptocurrencies could curb the effectiveness of capital controls that developing countries typically use to ensure macroeconomic stability.
  • Stablecoins pose particular risks in developing countries with strong demand for reserve currencies, UNCTAD said. The International Monetary Fund has also expressed concern over the risks that cryptocurrencies could have as legal tender.
  • UNCTAD suggested regulating crypto exchanges, digital wallets and decentralized finance. Financial institutions could also be banned from holding cryptocurrencies (including stablecoins) or offering related products.
  • It urged global coordination among authorities on taxing cryptocurrency, regulation and information sharing and pushed for restrictions on crypto advertisements.
  • Finally, it suggested a redesign of capital controls to take into account the decentralized, borderless and pseudonymous features of cryptocurrencies.

See related article: Crypto crash justifies RBI’s stance: central bank chief