IMF flags obstacles to debt restructuring, says banning crypto should be an option
‘Think about the unthinkable’: The IMF chief warns that the world is a completely different place after crises like Covid.
Bloomberg / Contributor / Getty Images
Group of 20 (G20) nations have some disagreements over debt restructuring for troubled 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 South Asian neighbors Sri Lanka, Bangladesh and Pakistan seek urgent IMF funds due to an economic slowdown caused by the COVID-19 pandemic and the Russia-Ukraine war.
China, the world’s biggest bilateral creditor, on Friday urged the group of major economies to conduct a fair, objective and in-depth analysis of the causes of global debt issues as it steps up calls for lenders to take a big haircut, or accept losses, on loan.
“On debt restructuring, while there are still some disagreements, we now have the roundtable on global sovereign debt with respect to all public and private creditors,” IMF Managing Director Kristalina Georgieva told reporters after chairing the roundtable with Indian Finance Minister Nirmala Sitharaman.
“We just finished a session where it was clear that there is a commitment to bridging differences for the benefit of the countries.”
US Treasury Secretary Janet Yellen said there were no “deliverables” from the meeting, which was largely organizational.
Further discussions by the panel, which includes major bilateral creditors including China, India and the G7 countries, several debtor countries, are scheduled around the time of the IMF and World Bank spring meetings in April.
“We certainly agreed that this is a useful forum,” Yellen told Reuters in an interview. – We are looking forward to participating.
Apart from debt restructuring, regulation of cryptocurrencies is another priority area for India, which Georgieva agreed with.
“We need to distinguish between central bank digital currencies that are backed by the government and stablecoins, and cryptoassets that are privately issued,” Georgieva said.
“There needs to be a very strong push for regulation … if regulation fails, if you’re slow to do it, then we shouldn’t take it off the table and ban these assets, because they could create financial stability risks.”
Yellen said she had not proposed “an outright ban on crypto activities, but it was critical to put a strong regulatory framework in place.”
