Dados necessários para melhorar nosso serviço e personalizar a sua experiência.
Matheus Puppe comments on the global discussion around cryptocurrencies
Report from Canaltech dealt with the UN's position in relation to the global discussion around cryptocurrencies. Dr. Matheus Puppe, partner in the TMT, Privacy & Data Protection area at Maneira Advogados,was heard to comment on the matter.
UN says cryptos are bad for nations and makes recommendations for the sector
By Diego Marques | Edited by Claudio Yuge | July 19, 2022
The United Nations (UN) does not want to be left out of the global discussion around cryptocurrencies. Therefore, it released a document entitled All that glitters is not gold (“Not everything that glitters is gold”, in free translation). The intention of the world body is to show the high cost to governments and investors of cryptocurrencies not being regulated.
In Brazil, a text has already been approved by senators and is now being processed in the chamber of deputies. Bill 4401/2021 aims to impose rules and guidelines for the sector here in the country. The PL vote was postponed until after this year's elections.
Europe is also moving to approve new rules to improve oversight of crypto assets and ensure that digital currencies can be tracked in the same way as traditional money transfers.
Now it is the UN's turn, in this sense the world body published a summary of UNCTAD (United Nations Conference on Trade and Development), the institution's main subsidiary body. The document explains that the financial benefits of cryptocurrencies do not outweigh the risk for investors and makes some recommendations for countries to follow the regulatory measures indicated in order to reduce the risks of investing in the sector that could even threaten the stability of nations.
UN makes recommendations for countries to follow the regulatory measures indicated in order to reduce the risks of investing in cryptocurrencies, which can even threaten the stability of nations. (Image: Reproduction/Envato/jirkaejc)
The problem with cryptocurrencies according to the UN
The UN document highlights that the returns from investing in cryptocurrencies are like other investments that do not result in real gains for the economy. In the end, there are more risks than advantages. The world body points out some reasons to be cautious with this new market.
First, investing in cryptocurrencies can cause financial instability. The UN explains that a sudden drop in prices causes economic damage that forces monetary authorities to intervene to restore financial stability.
In addition, the document highlights that, in developing countries, cryptocurrencies can be used illicitly, especially in currency evasion crimes.
Second, cryptocurrencies affect the way governments work with capital controls. For the UN, this is an essential area in the development of countries, where it is possible to contain the increase in macroeconomic and financial vulnerabilities.
Finally, if control rules are not defined for cryptocurrencies, this type of asset could become a widely used means of payment in countries, to the point of replacing local currencies. And this could compromise the monetary sovereignty of nations.
Europe moves forward to approve new rules with the aim of improving control of cryptocurrencies. The UN presented in its report similar rules that have already been defined by the European Union. (Image: Reproduction/Pixabay-Hans)
UN Special Recommendations
Based on this, the UN requests in the document that countries “make the use of cryptocurrencies less attractive” and that a tax be created on transactions involving digital currencies, in addition to the requirement for mandatory registration of digital wallets and crypto brokers.
The UN also recommended that governments take more drastic measures to prevent financial institutions from custodying cryptocurrencies and being prevented from providing access to the purchase and sale of crypto assets to their customers.
For the United Nations, another point that must be addressed is the restriction or even banning of cryptocurrency advertisements in public places and on social media.
According to UNCTAD, there is an urgent need to protect people with low levels of education in underdeveloped countries. For the UN, this type of investor runs the risk of suffering “significant losses” when investing in cryptoactives.
For the UN, investors with little knowledge of economics run the risk of suffering “significant losses” when investing in cryptocurrencies. (Image: Reproduction/Envato/ADDICTIVE_STOCK)
“CBDCs” the solution proposed by the UN
The UN advises in the report that governments create their own payment systems using CBDCs, central bank digital currencies. The intention is that they serve as a public good.
CBDCs work similar to cryptocurrencies, however they are issued by governments and their value is supported by the government. The Bahamas is a successful example of a country that has already implemented government digital currency, called thesand dollar.
The UN report talks about China and its initiative to launch a CBDC and highlights the country as one of the major nations that have chosen to completely eliminate the crypto market. Other countries that have also banned digital currencies are Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia.
What do the experts say?
Experts commented on the document published by the UN. According to them, the world body takes a repressive stance against cryptocurrencies and that such an attitude should hinder the advancement of a technology that can be beneficial if it is supported by regulations that make it grow and not just repress it.
For Matheus Puppe, guest professor at the postgraduate course in New Technologies at the University of São Paulo (USP) and partner at Maneira Advogados, the concerns are understandable, and the UN certainly takes a biased position due to the war in Ukraine (in which Russia used crypto assets to “circumvent” sanctions), but one cannot generalize and go against digital transformation just because of some specific problems.
Matheus Puppe highlights that correlating cryptoactives with financial instability would be the same as saying that telegraphs are better and more stable than emails, in other words: a throwback to a time when the UN already understands the existing status quo and denies active changes.
In his opinion, the entity should endorse new developments, to encourage conscious progress by proposing new and appropriate measures to regulate technologies, and not fight to impose old and outdated rules. Humanity, explains Matheus, lives in an era of decentralized finance, in which new technologies allow such a solution, with broad control through technology, and not just in the hands of governments.
In this sense, Matheus believes that, with cryptoactives, countries move from the hands of economic policies of governments, to the state of the art of the global flow of assets, with mechanisms of excellence in information security and verification by the factor of public scrutiny (in technology) — but still anonymous in the data.
“After all, if central banks were synonymous with financial stability, many countries would not be as they are. We must embrace technological progress and the social (and legal) changes arising from it, and not fight for regression. Just like the motto of startups: not evolving, means dying little by little.”
Victor Jorge, professor of the MBA in company at FGV and partner at Jorge Advogados, has a similar opinion. He commented that the UN was very precise in pointing out that there is a very high risk related to the lack of regulation in the sector. However, this risk is already well known to all participants in the crypto market.
According to Victor, there is a contradiction in the idea of “sweeping the dirt under the carpet” by preventing advertising related to cryptoassets, or, even worse, suggesting the creation of centralized cryptoassets, which, in itself, undermines the basic nature of the main cryptoassets such as Bitcoin.
For him, other suggestions, such as charging taxes and greater control over portfolios, on the other hand, are healthy and natural for any market. The justification of the summary recently published by the UN “the growing adoption of cryptocurrencies around the world” is also strange.
Victor highlights that the increase in membership is a reflection of great social interest. Preventing or declaring war on cryptoassets will only bring more problems. The solution, for him, is serious regulation, well produced and studied, in order to enable the continuity of thousands of projects with the necessary legal security for participants.
https://canaltech.com.br/criptomoedas/onu-221006/https://canaltech.com.br/criptomoedas/onu-221006/
See other related news stories
Press
Averages should not ignore the Contumacious Debtor Law, experts say
May 11, 2026Media should not ignore the Contumacious Debtor Law, experts say Risks are greater for companies that fail to comply with balance sheet obligations and are unaware of the situation of related parties By Suzana Liskauskas, Para o Valor — Rio de Janeiro Instituted...
