Cryptocurrency

The mission of this committee seems more important than ever now. Cryptocurrency and related topics, such as NFTs, frequently make the news for innovation, promise, volatility, and dangers. While some nations are adopting cryptocurrencies into national policies, others are seeking to prevent the use of the technologies. Such inconsistent legislation and public perception is leading to calls for consistent and clear regulation on a global scale (IMF). This is exactly what this committee can, and hopefully will, provide to the international community. This will help the technology to develop safely, in whatever capacity is agreed upon. Two key issues which the committee should stay cognizant of are the environmental issues associated with crypto-tech and the various use cases of cryptocurrencies.

Bitcoin and other leading cryptocurrencies (and by extension NFTs) are massive energy-sucks, which can lead to a great deal of pollution.

The Guardian reported in February 2021 that Bitcoin mining uses more electricity than some entire countries. For more perspective, a study in 2018 found that there was a period of time where for every $1 of Bitcoin created, there was $1 worth of environmental damage as a result. This committee must be mindful of such stark environmental impacts. The costs and benefits of this technology are also not distributed equally among countries, and nations should be mindful of where their nation’s interests lie. Whatever use cases are pushed forward for crypto must address such issues.

Also centrally important is to not treat cryptocurrency or even a single cryptocurrency as a monolith. Some have primarily found use as stores of values and investments due to high transaction fees (known as gas fees), while others are intended to have stable prices and replace currency in day-to-day transactions. As delegates are finalizing their countries' positions, they must consider these nuances to be able to put forward working papers that are both comprehensive and comprehensible. Along with this is considering blockchain technologies other than cryptocurrency alone but which may rely upon cryptocurrency, such as NFTs or other smart contract technology. Take advantage of your time to research and form expertise to come up with a comprehensive position which best benefits your nation.

Best,

James Glaser
Assistant Director