Finance Minister Nirmala Sitharaman has said that India’s G20 presidency aims to develop a common framework for all countries to manage risks associated with cryptocurrencies in the wake of the recent shocks in the crypto market.
Last year’s episode of FTX’s bankruptcy and its spat with Binance triggered a major selloff in the market and reduced liquidity. This event made the world realize the vulnerability of this asset class as they have no underlying value.
“Cryptocurrencies are a very important part of the discussion during the #G20India presidency, given so many collapses and shocks in cryptocurrencies. We seek to develop a common framework for all countries to deal with this issue,” she said during a discussion at the Peterson Institute for International Economics in Washington.
She also said the G20 is trying to bring all countries together to address debt problems in middle-income and low-income nations such as Sri Lanka and Ghana.
During the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in February, it was agreed to strengthen the multilateral coordination of official bilateral and private creditors to address the worsening debt situation and facilitate coordinated debt management for debt-ridden countries.
The World Bank and the IMF are also holding a round table conference on global sovereign debt. The first discussions took place at the G20 FMCBG meeting in Bengaluru, she said, adding that India’s G20 presidency will generate discussion and information sharing on this issue and it will be taken forward positively.
“In the G20, there is an opportunity for India to bring all countries together to address debt problems in middle-income and low-income countries. Multilateral institutions will come up with resolutions for debt-laden countries in 3 to 5 years, Sitharaman said.
Last December, World Bank President David Malpass said the world’s poorest countries owed $62 billion in annual debt service, a 35% increase over $46 billion in 2021, triggering a higher risk of default.
Malpass also said that low-income countries are at high risk of debt distress or are already in it, and debt crises are also spreading to middle-income countries.
Under the G20 presidency, India has been pushing for ways to tackle the worsening debt vulnerabilities faced by developing countries, largely due to the ongoing geopolitical tensions and the pandemic.
It is feared that if not addressed, developing countries’ growing debt vulnerability could trigger global recession and push millions into extreme poverty.
Sitharaman also said that India is carrying forward agendas of previous G20 presidencies, bringing issues to the table that India considers important and also facilitating future G20 presidencies to build on the legacy of the G20 presidencies.
Noting that emerging markets hold the G20 presidency for three consecutive terms from Indonesia in 2022, India in 2023 and Brazil next year, she said this will bring emerging market views to the fore and also the voice of the Global South at the G20 the table.
Regarding the business environment in the country, she said that foreign investment has been steadily coming to India. “I would ask the potential investors to come and see what is happening in India instead of listening to perceptions built by people who have not visited the ground but are writing reports.”
Talking about India’s goals for the next 5 years, the finance minister said, “Today we are in the process of providing basic amenities to citizens like houses, electricity, transport etc. and empowering them. Financial inclusion is emphasized so that everyone have bank accounts and benefits reach them directly.”
