UN Official Advocates for Exploring Cryptocurrencies, CBDCs, and Stablecoins to Boost Human Development

Highlights:

• UN official urges exploration of crypto, CBDCs, and stablecoins for human development improvements.
• Wignaraja advocates for utilizing CBDCs and stablecoins for financial inclusion and crisis support measures.
• She calls for sustainable practices in crypto development to protect the environment.

In a blog post published on Monday, Kanni Wignaraja, UN Assistant Secretary-General (ASG) and UNDP Regional Director for Asia and the Pacific called on the organization to explore how cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs) can drive human development.

How can cryptocurrencies, central bank digital currencies and stablecoins benefit Asia and the Pacific?@UNDPasiapac's @kanniwignaraja helps to decrypt crypto by exploring digital currencies' potential for scaling and diversifying development finance. https://t.co/St0BqVzPbc

— UN Development (@UNDP) February 17, 2025

The Economic Potential of Cryptocurrencies

A UN official has also recently emphasized the huge economic importance of alternative investments such as Bitcoin and Ethereum. She highlighted that their combined market value hit $3.9 trillion in December last year.

Wignaraja suggested that even a small portion of this immense wealth could be channeled to support education, healthcare, skills development, and job creation. Cryptocurrencies can assist in financial services provision to unbanked persons and the creation of new economic activities. They also provide cheap and fast cross-border transactions.

However, she noted that they have some risks, including price volatility and the possibility of use in illegal activities. She called on the regulators to put in place measures that will make the cryptocurrencies to have a positive impact. To Wignaraja, Cryptocurrencies should enhance human development without compromising financial stability.

Kanni Wignaraja wrote:

“To leverage cryptocurrencies for sustainable development calls for measures to mitigate such risks while harnessing and directing it towards development benefits. This may require a non-traditional regulatory framework that allows cryptocurrencies to contribute positively to human development”.

Leveraging CBDCs and Stablecoins for Financial Inclusion and Crisis Support

In her post, Wignaraja mentioned that CBDCs (digital currencies backed by governments) are being tested in countries like China, India, and Japan. She explained that these currencies could help bring unbanked people into the financial system and reduce corruption. Wignaraja suggested that UNDP assist national institutions in building oversight and risk management frameworks for CBDCs.

Wignaraja supported using stablecoins in digital ID and payment systems for secure transactions, helping the unbanked. She noted that during crises, digital currencies can preserve liquidity and assist vulnerable groups. She called for collecting data, best practices, and case studies to determine the safest ways to use stablecoins for financial resilience after crises.

The Environmental Challenges of Cryptocurrency Mining

She mentioned that cryptocurrency mining uses a lot of energy and creates significant e-waste. Some mining operations consume more energy than entire countries like Thailand or Vietnam, and they also harm water sources. She emphasized the need for sustainable practices in crypto development to protect the environment.

Challenges in Digital Finance

Wignaraja acknowledged the uncertainty around using digital currencies in sovereign bonds and debt restructuring. She highlighted the volatility of cryptocurrencies as a barrier to institutional investment. She emphasized the importance of open discussions, with groups like the UN playing a key role in shaping digital finance for real-world impact.