UNECA 2025 Model United Nations
United Nations Economic and Social Council
(ECOSOC)
Background Guide
Topic: Addressing the Economic and Security Challenges Posed by the Rise of Cryptocurrencies
Introduction to the Committee
The United Nations Economic and Social Council (ECOSOC) is one of the six principal organs of the
United Nations, established in 1945 under the UN Charter. It serves as the central platform for fostering
debate and innovative thinking on sustainable development, international economic policy, and social
progress. ECOSOC coordinates the work of 15 specialized UN agencies, eight functional commissions,
and five regional commissions, making it a vital body in implementing the 2030 Agenda for Sustainable
Development. ECOSOC’s mandate covers a broad range of global issues including economic stability,
social equity, and international cooperation. It acts as a bridge between policy formulation and
on-the-ground implementation, fostering collaboration among governments, civil society, and the
private sector. Given its role in promoting inclusive growth and global governance, ECOSOC plays a
central part in discussions around cryptocurrencies and digital assets, which have reshaped financial
systems, trade, and development. By examining both the economic opportunities and security threats
posed by these technologies, ECOSOC aims to guide member states toward balanced, sustainable,
and equitable digital finance frameworks.
Overview
The rapid rise of cryptocurrencies has transformed the global financial landscape, challenging
traditional banking systems and regulatory frameworks. Initially designed to decentralize financial
control and enhance user autonomy, cryptocurrencies now represent a multi-trillion-dollar market
influencing trade, investment, and monetary policy. However, this innovation comes with profound
economic and security challenges. Volatile prices destabilize emerging markets, while unregulated
transactions enable money laundering, terrorist financing, and tax evasion. The pseudonymous nature
of blockchain transactions makes it difficult for governments to monitor illicit activity, posing threats to
both economic sovereignty and international security. At the same time, digital currencies hold
transformative potential for financial inclusion, cross-border payments, and innovation in developing
economies. ECOSOC must therefore balance promoting innovation with protecting global financial
integrity. The debate now centers on how countries can cooperate to establish international standards
for cryptocurrency regulation, particularly regarding Know Your Customer (KYC) and Anti-Money
Laundering (AML) measures, while maintaining equitable access to the digital economy.
Key Terms
Cryptocurrency: A form of digital or virtual currency that uses cryptographic techniques to secure
transactions and control the creation of new units. Most cryptocurrencies operate on decentralized
networks based on blockchain technology.
Blockchain: A distributed digital ledger that records transactions across multiple computers securely
and transparently. It serves as the foundation for most cryptocurrencies.
Anti-Money Laundering (AML): A set of laws and regulations aimed at preventing criminals from
disguising illegally obtained funds as legitimate income. In the crypto sector, AML policies require
monitoring of suspicious transactions and customer verification.
Know Your Customer (KYC): A process by which financial institutions and service providers verify the
identity of their clients to prevent fraud, money laundering, and terrorist financing.
Central Bank Digital Currency (CBDC): A digital form of a country’s national currency issued and
regulated by its central bank, offering a state-backed alternative to decentralized cryptocurrencies.
Historical Events
Year Event Relevant Parties Involved
Description/Impact
2009 Launch of Bitcoin Independent DevelopersBitcoin, the first decentralized cryptocurrency, is launched, introduci
2013–2017 Global Expansion of Cryptocurrencies
Early Investors, Exchanges
Dozens of new cryptocurrencies emerge; unregulated exchanges a
2019 FATF Issues Crypto Guidelines
FATF, G20 Nations The FATF introduces international standards for crypto-related AML
2021 El Salvador Adopts Bitcoin
Government
as Legal Tender
of El Salvador,
The IMF
first nation to adopt Bitcoin as official currency; triggers debates
2022–2023 Major Crypto Collapses (FTX,
GlobalTerra-Luna)
Investors, Regulators
Market instability highlights lack of oversight, leading to large financ
2024–2025 Global Push for Regulation
IMF,
and
BIS,
CBDCs
National Governments
Governments explore CBDCs and cross-border frameworks to regu
Relevant Parties
1. Member States: National governments are the primary regulators of cryptocurrency. Some (e.g., the
U.S., EU, Singapore) have developed detailed AML/KYC frameworks, while others struggle to integrate
crypto into existing financial systems. 2. Financial Action Task Force (FATF): The intergovernmental
organization sets global standards for AML/CFT (Countering the Financing of Terrorism). Its guidelines
on “virtual asset service providers” are key to international cooperation. 3. International Monetary Fund
(IMF) and World Bank: Both institutions analyze crypto’s impact on financial stability, monetary policy,
and development. They provide guidance for low-income countries to adopt balanced regulatory
measures. 4. Private Sector and Exchanges: Platforms like Binance, Coinbase, and other exchanges
facilitate billions in daily crypto transactions. Their compliance (or lack thereof) directly affects global
financial transparency. 5. Developing Economies: Many developing nations use crypto for remittances
and inflation protection. However, weak regulatory systems make them vulnerable to fraud and capital
flight. 6. Cybersecurity and Law Enforcement Agencies: Organizations such as Interpol and national
cybercrime units combat illegal crypto-related activities, including ransomware payments and digital
fraud.
Past UN Involvements and Resolutions
1. UN General Assembly Resolution 75/282 (2021): Encouraged international cooperation on digital
finance governance and called for transparency and inclusion in emerging technologies. 2. UNODC
Initiative on Cryptocurrency Crime (2022): Strengthened capacity-building efforts to trace illicit crypto
flows and support member states’ enforcement capabilities. 3. ECOSOC Report on Digital Economy
and Development (2023): Highlighted crypto’s role in sustainable growth and urged the creation of
equitable regulatory frameworks. 4. UNCTAD Policy Brief No. 100 (2023): Warned against the volatility
of cryptocurrencies in developing economies and advocated for stronger capital controls and public
education.
Preparation Advice
1. Understand Your Country’s Position: Research your nation’s stance on cryptocurrency adoption and
regulation. Consider how its economy, financial institutions, and development goals influence that
position. 2. Develop a Balanced Argument: Highlight both the economic benefits (innovation, inclusion)
and the risks (instability, crime). Your position should reflect national interests within global cooperation.
3. Prepare an Opening Speech and Draft Resolution: Focus on solutions that strengthen regulation,
improve global transparency, and preserve financial innovation. 4. Use Reliable Sources: Use reports
from the IMF, FATF, World Bank, BIS, and UN agencies to ensure accuracy. Avoid speculative or
non-verified crypto blogs. 5. Engage Diplomatically: Crypto regulation requires consensus. Find
common ground between pro-regulation states and those prioritizing innovation. Collaborate to form
inclusive, realistic resolutions.
Recommended Sources
- Financial Action Task Force (FATF): [Link] - International Monetary Fund (IMF):
[Link] - World Bank – Digital Development:
[Link] - UNCTAD – Digital Economy Reports:
[Link] - Bank for International Settlements (BIS):
[Link] - UNODC – Crypto Crime Reports: [Link]
Bibliography
Financial Action Task Force. Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset
Service Providers. FATF, 2024. International Monetary Fund. Global Financial Stability Report 2025:
Digital Assets and Monetary Policy. IMF, 2025. United Nations Conference on Trade and Development
(UNCTAD). Digital Economy Report 2024. UNCTAD, 2024. World Bank. Crypto Regulation and
Financial Inclusion: Policy Framework for Developing Economies. World Bank, 2025. Bank for
International Settlements. The Future of Payments: CBDCs and Digital Finance. BIS, 2024. UN Office
on Drugs and Crime. Cryptocurrencies and the Challenge of Global Crime. UNODC, 2023.
