The United Nations (UN) advised the governments of Kenya and other developing nations to impose comprehensive regulations on their cryptocurrency sectors.
Calling for a Clampdown
The global organization that maintains international peace and security – the United Nations – seems to have the cryptocurrency industry in its sight.
In a recent policy brief, it urged a range of developing countries, such as Kenya, to enforce strict rules on the sector, mandatory registration on crypto exchanges, and taxation on people who have generated earnings from trading with bitcoin or altcoins. In a bid to provoke a clampdown on the industry, the UN urged to:
“Require the mandatory registration of crypto-exchanges and digital wallets and make the use of cryptocurrencies less attractive, for example, by charging entry fees for crypto exchanges and digital wallets and/or imposing financial transaction taxes on cryptocurrency trading.
Regardless of the reason for the use of cryptocurrencies, crypto exchanges play a crucial role in enabling their broader deployment. Such exchanges function as clearinghouses, intermediating conversions between cryptocurrencies and sovereign currencies.”
Subsequently, the UN called on all banks and monetary institutions to stop providing clients with cryptocurrency services, including holding stablecoins and digital assets.
Crypto Thrives in Kenya
The initiative proposed by the United Nations might not be met with great joy in the African country. According to a recent study conducted by the same organization, Kenya is the leader in cryptocurrency adoption on the continent: 8.5% of the locals, or 4.25 million people admitted to being HODLers.
Interestingly, this adoption rate surpassed leading economies such as the United States (8.3%), which proves the narrative that digital assets are more popular in less developed nations.
The research determined that war-torn Ukraine is the global leader, with 12.7% of its residents having exposure to crypto, while Russia is second with 11.9%. Venezuela (10.3%), which has been battling high inflation and economic turmoil for years, ranked third.
Nonetheless, the UN stated that establishing the value of digital currencies held by different countries is difficult due to the lack of supervision in the space:
“The returns from cryptocurrency trading and holding are, as with other speculative trades, highly individual. On balance, they are overshadowed by the risks and costs they pose in developing countries. The sector is not regulated in the country and remains largely unregulated even in the developed world.”