Finance Minister Nirmala Sitharaman has said India’s G20 presidency aims to develop a common framework for all countries to deal with risks associated with cryptocurrencies in the wake of the recent shocks witnessed in the crypto market.
The last year’s episode of FTX‘s bankruptcy, and its spat with Binance triggered a huge sell-off in the market and reduced liquidity. This event made the world realise the vulnerability of this asset class as they do not have any underlying value.
“Cryptocurrencies are a very important part of the discussion under 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 matter,” she said at a discussion in Peterson Institute for International Economics here.
She also said G20 is trying to bring together all countries to address debt distress in middle-income and low-income nations like Sri Lanka and Ghana.
During the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in February, it was agreed to strengthen multilateral coordination by official bilateral and private creditors to address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries.
The World Bank and IMF are also holding a roundtable on Global Sovereign Debt. Initial discussions happened at the G20 FMCBG meeting in Bengaluru, she said, adding India’s G20 presidency will create discussion and sharing of information on this issue and it will be taken forward positively.
“In G20, there is an opportunity for India to bring all countries together to address debt distress in middle-income and low-income countries. Multilateral institutions are coming up with resolutions for debt-laden countries in 3 to 5 years’ time,” Sitharaman said.
In December last year, World Bank President David Malpass said the world’s poorest countries owed $62 billion (roughly Rs. 5,09,100 crore) in annual debt service, a 35 percent growth over $46 billion (roughly Rs. 3,77,700 crore) in 2021, triggering a higher risk of defaults.
Malpass also said 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 pressing for ways to tackle the aggravated debt vulnerabilities facing developing nations mainly on account of the continuing geopolitical tensions and the pandemic.
It is feared that if left unaddressed, the mounting debt vulnerabilities of developing nations could trigger global recession and push millions to extreme poverty.
Sitharaman also said, India is carrying forward agendas of earlier G20 presidencies, bringing issues on table that India considers important and also making way for the future G20 presidencies to build upon the legacy of G20 India Presidency.
Observing that emerging markets have G20 presidencies for three consecutive terms from Indonesia in 2022, India in 2023 and Brazil next year, she said, this will bring views of emerging markets to the front and also the voice of the Global South onto the G20 table.
On the business environment in the country, she said foreign investments have kept coming to India. “I would tell the prospective investors to come and look at what’s happening in India rather than listening to perceptions being built by people who’ve not visited the ground but writing reports.” Talking about goals of India for the next 5 years, the finance minister said, “Today, we are reaching saturation in providing basic facilities to citizens such as houses, electricity, transport, etc and are empowering them. Emphasis is there on financial inclusion so that all have bank accounts and benefits reach them directly.”