Coordinated cross-border policies are needed to ensure that cryptocurrencies don’t do more harm than good in developing countries. Unless both the public and private sectors embrace critical reforms, people and governments will increasingly be attracted by low-cost, high-risk, and murky alternatives to traditional banking.
LONDON – Many regard the market for Bitcoin – the world’s leading cryptocurrency – as a game of winners and losers played out among hedge funds, amateur investors, geeks, and criminals. The huge risk inherent in a highly volatile anonymous digital currency is best left to those who understand the game well, or who don’t really care because they can mitigate the risk or absorb any losses. But Bitcoin recently has become more attractive for countries and individuals with limited access to conventional payment systems – that is, those least equipped to manage the underlying risk.
LONDON – Many regard the market for Bitcoin – the world’s leading cryptocurrency – as a game of winners and losers played out among hedge funds, amateur investors, geeks, and criminals. The huge risk inherent in a highly volatile anonymous digital currency is best left to those who understand the game well, or who don’t really care because they can mitigate the risk or absorb any losses. But Bitcoin recently has become more attractive for countries and individuals with limited access to conventional payment systems – that is, those least equipped to manage the underlying risk.