September 26, 2022

UNCTAD proposes to ban banks from using cryptocurrencies

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UNCTAD proposes to ban banks from using cryptocurrencies

The United Nations Development Authority (UNCTAD) believes that the risks and costs that cryptocurrencies incur outweigh the benefits of using them, and therefore are not suitable for banks.

UNCTAD urged world governments to introduceadditional taxes on cryptocurrency transactions and restrictions on advertising of digital assets to increase state revenues and ensure financial stability in developing countries.

A report published by UNCTAD notes thatthe growing use of cryptocurrencies for domestic payments and the transfer of funds by migrant workers back home challenges the authority of the state in monetary matters and may cause a “leakage” of funds for development.

The agency has recommended higher taxes on cryptocurrency transactions, requiring exchanges and wallets to register with regulators, and limiting or banning advertising for cryptocurrencies.

“The benefits that cryptocurrencies cansome individuals and financial institutions are overshadowed by the risks and costs they entail, especially in developing countries,” UNCTAD said.

According to the agency, risks such as evasionfrom taxes and losses from price fluctuations will need to be compensated by central banks. UNCTAD recommends that countries “prohibit regulated financial institutions from holding stablecoins and cryptocurrencies or from offering related products to customers.”

Recall that recently US Senator Elizabeth Warren (Elizabeth Warren) proposed to reduce the participation of Wall Street in the crypto industry.