The United Nations (UN) in its year-end report on the global economy calls cryptocurrency a “new frontier” in electronic and digital finance.
According to the UN, cryptocurrency and blockchain technology have the potential to create new and revolutionized business models that are devoid of old, redundant financial flaws or processes hence, they increase efficiency.
In its report, the UN highlights the following advantages and potential of cryptocurrencies, blockchain and distributed ledger technology. It reads:
“Cryptocurrencies represent a new frontier in digital finance and their popularity is growing. The decentralized networks for cryptocurrencies, Bitcoin being a well known example can keep track of digital transactions. They enable value to be exchanged and can give rise to new business models which would otherwise require significant regulatory and institutional commitments.”
On Innovativeness and Trust over Traditional Finance Systems
The report states: “The innovativeness of this system lies in the way in which the various parts combine to create the trust and guarantees that the traditional financial system derives from institutions and regulation. The incentives align with the interest of participants towards contributing to the system’s security. In contrast, the traditional financial system relies on a complex armature of reporting, oversight and implicit or explicit guarantees, ultimately backed by the reputation of a central authority. As such, the blockchain technology presents the possibility – a first in the field of finance that trust in institutions backed by government can be replaced by trust in computer code.
UN Crypto and Blockchain Proposed Use Cases
The United Nations report further outlined some probable crypto/blockchain use cases linked to the organizations goals; for example, a crypto token called Climatecoin is being considered as a basis for creating a global market for carbon emissions. The token will allow peer-to-peer exchange of carbon credits and a direct connection with the internet of things. It would be possible for devices to calculate their own carbon emissions and purchase carbon credits to offset those emissions.
There are also proposals on using blockchain technology as a distributed ledger of real world information for property registration, personal identity, provenance of food and medicines, among many other types of data. The UN and the World identity Network are exploring ways to register the identities of children on a blockchain as a means of combating child trafficking.
In all, this latest report titled “World Economic and Social Survey 2018” further stretches the positive stance of the UN on digital assets/cryptocurrency. The organization continues to show interest in the sector haven been involved in joint projects with start-ups and recognized firms within the crypto industry; notably IOTA and XRP token developers (Ripple).
Do you think the UN opinion will drive further adoption and activity in the industry? Share your thoughts in the comments?
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