A top UN official is calling for a strategic assessment of digital currencies’ role in global development, balancing innovation with financial stability. In a recent blog post, Kanni Wignaraja, UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific, called for regulatory frameworks that support responsible digital finance.
The official statement was shared on social media by UN Development, highlighting the need to explore digital currencies’ role in scaling and diversifying development finance. Wignaraja’s post raised key questions about how digital currencies could be integrated into global economic systems, emphasizing the need for a strategic and measured approach.
Social media post from UN Development. Source: X
Testing Crypto’s Role in Human Development Under Strict Safeguards
Wignaraja noted that Bitcoin and Ethereum reached a market peak of $3.91 trillion last December. She suggested that even a fraction of this capital could be redirected toward education, healthcare, skills development, and job creation. However, she stressed that cryptocurrency’s volatility and potential for misuse require safeguards to mitigate risks while leveraging digital assets for sustainable development.
She proposed that development organizations, in collaboration with financial regulators, establish controlled trials for cryptocurrency funds to assess their impact on human development. This approach would allow institutions to explore how digital currencies can be harnessed without endangering financial stability. Wignaraja called for a non-traditional regulatory framework that balances financial security with innovation, ensuring that cryptocurrencies are used effectively to address developmental challenges.
CBDCs and Stablecoins: Expanding Financial Inclusion and Crisis Resilience
CBDCs, digital versions of traditional currencies backed by governments, are already being tested in China, India, Indonesia, Thailand, Singapore, Japan, and South Korea. Wignaraja highlighted their potential to provide a secure alternative to cash, integrating previously unbanked populations into the formal financial system. She also pointed to blockchain’s transparency as a tool for reducing corruption and enhancing accountability in financial transactions. To achieve these goals, she urged the UN Development Programme (UNDP) to support national institutions in building oversight and risk management capabilities.
Stablecoins, which are tied to fiat currencies, offer a less volatile alternative to cryptocurrencies and could serve as a financial lifeline during economic crises. Wignaraja emphasized the need to examine their role in maintaining liquidity and supporting vulnerable communities. She called for data collection, best practices, and case studies to determine the safest and most effective ways to use stablecoins in post-crisis financial resilience efforts.
Beyond financial inclusion, Wignaraja highlighted the environmental concerns associated with cryptocurrency mining. With some operations consuming more energy than entire countries like Thailand or Vietnam, she advocated for sustainable crypto development practices to prevent further environmental damage.
