‘Consider the unthinkable’: IMF chief warns world is a really different place after crises like Covid.
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Group of 20 (G20) nations have some disagreements over restructuring debt for distressed economies, the chief of the International Monetary Fund (IMF) said on Saturday, adding that banning private cryptocurrencies needs to be an option.
India’s G20 presidency comes as its South Asian neighbors Sri Lanka, Bangladesh and Pakistan are searching for urgent IMF funds as a result of an economic slowdown attributable to the COVID-19 pandemic and the Russia-Ukraine war.
China, the world’s largest bilateral creditor, urged the group of massive economies on Friday to conduct a good, objective and in-depth evaluation of the causes of worldwide debt issues as clamor grows for lenders to take a big haircut, or accept losses, on loans.
“On debt restructuring, while there are still some disagreements, we now have the worldwide sovereign debt roundtable with consideration of all private and non-private creditors,” IMF Managing Director Kristalina Georgieva told reporters after chairing the roundtable with Indian Finance Minister Nirmala Sitharaman.
“We just finished a session wherein it was clear that there’s a commitment to bridge differences for the good thing about countries.”
U.S. Treasury Secretary Janet Yellen said there have been no “deliverables” from the meeting, which was mostly organizational.
Further discussions of the panel, which incorporates major bilateral creditors including China, India and the G7 countries, several debtor countries, are planned across the time of the IMF and World Bank spring meetings in April.
“We actually had that agreement that it is a useful forum,” Yellen told Reuters in an interview. “We sit up for participating in it.”
Crypto restrictions
Other than restructuring debt, regulating cryptocurrencies is one other priority area for India, which Georgieva agreed with.
“We’ve got to distinguish between central bank digital currencies which can be backed by the state and stable coins, and crypto assets which can be privately issued,” Georgieva said.
“There needs to be very strong push for regulation… if regulation fails, when you’re slow to do it, then we should always not take off the table banning those assets, because they might create financial stability risk.”
Yellen said she had not suggested the “outright banning of crypto activities, however it was critical to place in place a powerful regulatory framework.”