Debt Restructuring – G20 Divided on Debt, United on Private Crypto Ban

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Although the meeting featured some disagreements among nations over debt restructuring to struggling economies, there was consensus on banning private digital currencies.

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Reuters | bangalore | Posted on 26.02.23, 00:23

Group of 20 (G20) countries have disagreements over debt restructuring of struggling economies, the head of the International Monetary Fund (IMF) said on Saturday, adding that banning private cryptocurrencies should be an option .

India’s G20 Presidency comes as its South Asian neighbors Sri Lanka, Bangladesh and Pakistan seek urgent funds from the IMF due to an economic downturn caused by the Covid-19 pandemic and the Russian-Russian war. Ukrainian.

China, the world’s largest bilateral creditor, on Friday urged the group of major economies to conduct a fair, objective and thorough analysis of the causes of global debt problems as clamor grows for lenders to accept a large haircut or accept loan losses.

On debt restructuring, although there are still disagreements, we now have the global sovereign debt roundtable taking into account all public and private creditors, IMF Managing Director Kristalina Georgieva told reporters after chairing the roundtable with Indian Finance Minister Nirmala Sitharaman.

We have just completed a session in which it was clear that there is a commitment to bridging differences for the benefit of countries. US Treasury Secretary Janet Yellen said there were no deliverables from the meeting, which were mostly organizational.

Further discussions from the panel, which includes major bilateral creditors including China, India and G7 countries, several debtor nations, are scheduled for the time of the IMF and World Bank spring meetings in April.

We certainly agreed it’s a useful forum, Yellen told Reuters in an interview. We look forward to participating.

Crypto restrictions

Besides debt restructuring, cryptocurrency regulation is another priority area for India, which Georgieva agreed with. We need to distinguish between central bank digital currencies that are backed by government and stablecoins, and crypto assets that are issued by the private sector, Georgieva said.

There must be a very strong pressure for regulation… if regulation fails, if you are slow to do it, then we should not raise the table by banning these assets, because they can create a risk for financial stability .

Yellen said she hadn’t suggested an outright ban on crypto activities, but that having a strong regulatory framework in place was essential. India has asked the IMF and the Financial Stability Board to jointly prepare a technical paper on crypto assets, which could be used to formulate a coordinated and comprehensive policy to regulate them.

The international organizations are expected to present their joint document at the 4th meeting of finance ministers and central bank governors in October.

Reuters

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