Last Updated: 12 August 2022
A new report from the United Nations gives an interesting insight into the cryptomarket today. The UN published this because the organisation is concerned about the lack of regulation, as this is not yet the case in many countries. This while, crypto is being adopted everywhere.
Crypto is a risk
The United Nations Conference on Trade and Development (UNCTAD) has released a new policy paper on crypto, and it shows that there are crypto investors in almost every country. According to the research, this is mainly due to the corona crisis — a time when many people found their way to crypto.
‘The global use of cryptocurrencies increased exponentially during the coronavirus (COVID-19) pandemic. Such private digital currencies are especially widespread in developing countries, which poses significant risks and costs to national monetary sovereignty, policy space, and macroeconomic stability.’
Ever heard of crypto-currency?
So it’s not always a good thing, says the UN. “If left unchecked, cryptocurrencies can become a widespread means of payment, and even unofficially replace domestic currencies (a process called cryptoisation), which can jeopardise countries’ monetary sovereignty,” the report says.
Countries such as El Salvador and the Central African Republic are thus examples of this cryptoisation. Both countries have adopted bitcoin as legal tender in the past 12 months.
How should it be done?
The UN provides all kinds of tips in this report to mitigate the risks of crypto. It includes recommendations such as taxing crypto and banning ads on social media.
Finbold, the news platform, calls India, where 7.3% of the population invests in crypto, a country that plays a ‘pioneering role in the global regulation of cryptocurrency.’ Here they ‘regulate’ crypto by taxing it with a 30% profit tax and 1% tax on each transaction. Whether this works out well is another matter.
If the Indian government wants to suppress crypto, it will certainly succeed. The trade volume in India dropped drastically after the introduction of the 30% tax. In the worst case, a drop of 55% was recorded.
Percentages in other countries
The study also highlights how much other countries invest in crypto. UNCTAD has shown this in a graph, where Ukraine, probably because of the war, is at the top with 12.7%.
The countries with the highest percentages are Ukraine, Russia with 11.9%, Venezuela (10.3%), Singapore (9.4%), Kenya (8.5%), and the US (8.3%).
The Netherlands is not to be found in this policy paper. This is striking since more studies have been published showing that at least more than 3.4% of the inhabitants invest in crypto in the Netherlands. In this study, 3.4% is still enough to be in the top 20 crypto-economies.