United Nations Calls Bitcoin and Crypto ‘New Frontier’ in Finance, Explores Ripple and IOTA Technologies
In a year-end report on the global economy, the United Nations calls cryptocurrency a “new frontier” in digital finance. According to the UN, crypto and blockchain technology at large have the potential to create new and revolutionary business models that cut red tape and dramatically increase efficiency.
This is not the first time the UN has expressed its interest in digital assets. In May, the United Nations Office for Project Services (UNOPS) revealed its collaboration with IOTA to “explore how IOTA’s innovative technology – which provides an open-source distributed ledger for data management – can increase the efficiency of UNOPS operations.” UNOPS is also exploring Ripple’s suite of cross-border payment solutions, according to a report from the Association for Financial Professionals from late 2017.
The new report from the UN, called the “World Economic and Social Survey 2018”, dives into the advantages of crypto, blockchain and distributed ledger technology.
Here’s a look at the highlights.
Crypto Represents “New Frontier” in Digital Finance
“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.
Blockchain and Crypto Have Many Use Cases
“For example, a value token called climatecoin is being considered as a basis for creating a global market for carbon emissions, allowing peer-to-peer exchange of carbon credits and a direct connection with the Internet of Things. It would then be possible for devices to calculate their own carbon emissions and purchase carbon credits to offset those emissions.
There are also proposals for using blockchain technology as a distributed ledger of real-world information on property registration, personal identity, and provenance of food and medicines, among many other types of data. The United Nations and the World Identity Network are exploring ways to register the identities of children on a blockchain as a means of combating child trafficking.”
Innovation Comes From Inherent Trust
“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 the interest of participants towards contributing to the system’s security.
In contrast, the traditional system relies on a complex armature of reporting, oversight and implicit or explicit guarantees, ultimately backed by the reputation of the 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.”
You can check out the full report here.
Image via Wikimedia