All That Glitters is Not Gold: UN Agency Slams Crypto Adoption

The United Nations Conference on Trade and Development (UNCTAD) believes the impact of cryptocurrencies should be limited in developing nations. According to the agency, digital assets are unstable financial products that could cause further issues to already shattered economies.

Amid the global monetary crisis, numerous residents of emerging countries chose to convert their depreciating fiat currencies into stablecoins. However, the UNCTAD warned that such tokens also pose risks and individuals should avoid them.

• Multiple surveys have estimated that cryptocurrencies are more prevalent in countries where the local population battles high inflation, financial crisis, or even military conflicts. In one of its recent announcements, the UNCTAD claimed that digital asset adoption is the highest in war-torn Ukraine.
• There, almost 13% of the residents have allocated some of their wealth to crypto. Surprisingly, the second place belongs to its military rival – Russia (11.9%).
• The agency maintained that investing in bitcoin or altcoins could be the wrong strategy, especially for citizens of emerging economies. This is because of the notorious volatility of the asset class.

“If cryptocurrencies become a widespread means of payment and even replace domestic currencies unofficially (a process called cryptoization), this could jeopardize the monetary sovereignty of countries,” the UNCTAD said.

• It is safe to say that crypto has attracted attention toward itself in the past few years (especially during the bull run in 2021).
• Ironically, the United Nations agency argued that “all that glitters is not gold,” alerting investors to stay away from such appealing but potentially dangerous assets.
• Subsequently, the organization said stablecoins pose the same risks, and investors should be utterly careful when dealing with them.