UNDP Embraces Cryptocurrency for Human Development

The United Nations Development Programme (UNDP) is seeking to harness the potential of cryptocurrency to drive human development, while minimizing its financial risks. In a recent blog post, UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific, Kanni Wignaraja, emphasized the need for exploratory studies on the benefits of cryptocurrency, central bank digital currencies (CBDCs), and stablecoins in promoting human development.

Wignaraja acknowledged the significant economic value of alternative investment assets like Bitcoin and Ethereum, which held a market value of $3.9 trillion in December. She envisioned the potential of channeling a fraction of this value towards education, health, skills building, and jobs.

“Imagine channeling even a fraction of that [market value] towards education, health, skills building, and jobs,”

Benefits and Risks of Cryptocurrency

Wignaraja highlighted the benefits of cryptocurrency, including instant cross-border transfers and its potential to support unbanked and underbanked communities in securing their livelihoods amidst economic turmoil. However, she also expressed concerns about the highly volatile nature of the crypto market and its susceptibility to criminal activity.

Regulatory Measures and Mitigating Risks

To address these concerns, Wignaraja called for regulatory measures that can mitigate the risks associated with cryptocurrency while utilizing it to drive human development. She proposed the development of a non-traditional regulatory framework that allows cryptocurrencies to contribute positively to human development without compromising financial stability.

CBDCs and Stablecoins

Wignaraja also highlighted the development of CBDCs in key Asian countries, such as China, India, Indonesia, Thailand, Singapore, Japan, and Korea, which can potentially improve accountability and reduce corruption. Additionally, she emphasized the need to explore the use of stablecoins in enhancing financial resilience in recovering communities.

Testing Crypto Funds and Blockchain Technology

Wignaraja proposed that the UNDP begin testing crypto funds under strict safeguards to evaluate their impact. The organization is already working towards expanding blockchain and decentralized technology to help in tracking funds and reducing corruption.

In November 2024, the UNDP launched a blockchain education academy in collaboration with the Algorand Foundation to equip 24,000 UN personnel worldwide with the skills necessary to understand blockchain technology.

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