Over seven per cent of India's population owns digital currency, according to the UN, which said that the use of crypto-currency rose globally at an unprecedented rate during the Covid pandemic.
The UN trade and development body UNCTAD said that in 2021, developing countries accounted for 15 of the top 20 economies when it comes to the share of the population that owns crypto-currencies.
Ukraine topped the list with 12.7 per cent, followed by Russia (11.9 per cent), Venezuela (10.3 per cent), Singapore (9.4 per cent), Kenya (8.5 per cent) and the US (8.3 per cent).
In India, 7.3 per cent of the population owned digital currency in 2021, ranking seventh in the list of top 20 global economies for digital currency ownership as share of population.
“Global use of crypto-currencies has increased exponentially during the Covid pandemic, including in developing countries,” UNCTAD said.
In three policy briefs published on Wednesday, it said that while these private digital currencies had rewarded some and facilitated remittances, they are an unstable financial asset that could also bring social risks and costs.
The policy brief titled ‘All that glitters is not gold: The high cost of leaving crypto-currencies unregulated’ examines the reasons for the rapid uptake of crypto-currencies in developing countries, including facilitation of remittances and as a hedge against currency and inflation risks.
It said recent digital currency shocks in the market suggested that there are private risks to holding crypto, but if the central bank steps in to protect financial stability, then the problem becomes a public one.
“If crypto-currencies become a widespread means of payment and even replace domestic currencies unofficially (a process called cryptoisation), this could jeopardise the monetary sovereignty of countries,” it said.