April 23, 2024

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The International Monetary Fund points to the hurdles of debt restructuring, and says banning cryptocurrencies should be an option

The International Monetary Fund points to the hurdles of debt restructuring, and says banning cryptocurrencies should be an option

BENGALURU (Reuters) – The head of the International Monetary Fund said on Saturday that the G20 has some differences over debt restructuring for struggling economies, 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 financing from the International Monetary Fund due to the economic slowdown caused by the COVID-19 pandemic and the Russia-Ukraine war.

China, the world’s largest bilateral creditor, urged a group of major economies on Friday to conduct a fair, objective and in-depth analysis of the causes of global debt problems as clamor grows for lenders to take big action or accept losses. loans.

IMF Managing Director, Kristalina Georgieva, told reporters after chairing the roundtable with India’s Finance Minister Nirmala Sitharaman: “Regarding debt restructuring, while there are still some disagreements, we now have a global sovereign debt roundtable taking into account all public creditors.” and private.”

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“We just finished a session where it was clear that there was an obligation to bridge differences for the benefit of states.”

US Treasury Secretary Janet Yellen said there was no “outcome” from the meeting, which was mostly organizational.

Further discussions in the committee, which includes major bilateral creditors including China, India and G7 countries, and several debtor countries, are scheduled around the time of the spring meetings of the International Monetary Fund and World Bank in April.

“We certainly came to this agreement that this is a useful forum,” Yellen told Reuters in an interview. “We look forward to participating in it.”

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Apart from debt restructuring, cryptocurrency regulation is another priority area for India, which Georgieva agreed with.

“We have to differentiate between state-backed central bank digital currencies and stablecoins, privately issued crypto assets,” Georgieva said.

“There has to be very strong pressure for regulation… If regulation fails, if you’re slow to do it, we shouldn’t get off the table banning those assets, because it could create risks to financial stability.”

Yellen said she wasn’t suggesting “an outright ban on cryptocurrency activities, but a strong regulatory framework was necessary.”

(Reporting by Aftab Ahmed, Sarita Chaganti Singh, and Shivangi Acharya); Writing by Sudipto Ganguly; Edited by Krishna N. Das and William Mallard

Our standards: Thomson Reuters Trust Principles.