UN Studies IOTA, Ripple; Refers Crypto As ‘New Frontier’ In Finance
The United Nations refers cryptocurrency a “new border” in electronic or digital finance in a year-end survey on the world economy. According to the United Nations, cryptography and blockchain technology in general have the capacity to establish innovative and groundbreaking business models that reduce bureaucracy and improve productivity drastically.
This is not the first time the United Nations conveyed its interest in virtual currencies. In May, the United Nations Office for Project Services (UNOPS) disclosed its partnership with IOTA “to explore how innovative IOTA technology–which provides an open-source distributed data management booklet–can increase the efficiency of UNOPS operations.”
UNOPS also explores Ripple’s package of cross-border payment processing solutions, according to another report by the Association for Financial Professionals from late 2017. The latest UN report, the “World Economic and Social Survey 2018,” focuses on the benefits of cryptography, distributed ledger technology and blockchain. 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.”