The United Nations has called upon developing nations to restrict advertisements related to cryptocurrency warning of risks associated with the industry.
In a document dubbed “all that glitters is not gold’’, the United Nations Conference on Trade and Development (UNCTAD) recommended developing nations ensure financial regulation, and provide a safe, reliable and affordable public payment system adapted to the digital era, such as a central bank digital currency or fast retail payment system.
According to the UN, global use of cryptocurrencies increased exponentially during the covid 19 pandemic and has become prevalent in developing countries. The benefits that individuals and institutions get from these currencies have been shown to be less compared to the risks involved. The rise in digital currency use has been named a contributor to surging social media frauds and scams which have left consumers vulnerable.
With everything being digitized, many people have also turned to investing in digital currency hoping to make a good value in the long run. Scammers on the other hand have not been left behind and are always finding new ways to steal your money using cryptocurrency.
The lack of regulation around cryptocurrency has seen many people lose their money in this trap. The growth of bitcoin (BTC) which is the most relied-on digital currency, has attracted a lot of investors because they see it as uncorrelated with stocks, making it an option as a portfolio diversifier.
The unsafety of these digital currencies has seen some countries ban their use. Some of the countries that have named cryptocurrency illegal include Algeria, Bolivia, China, India, Colombia, Egypt, Indonesia, and Iran, among others. Other countries like the United States and El Salvador are however on the move toward regulating it.
Major banks have also strictly discouraged purchases of cryptocurrencies using their credit cards. In June last year, Kenyan NCBA bank warned its customers against buying, trading, or holding any virtual currencies, over safety issues. Some experts liken crypto trading to gambling, because of the lack of pattern in their rise and fall in value.
