Following the recent shocks in the cryptocurrency market, Finance Minister Nirmala Sitharaman stated that India's G20 presidency aims to develop a common framework for all countries to deal with the risks associated with cryptocurrencies.
The bankruptcy of FTX last year, as well as its spat with Binance, triggered a massive sell-off in the market and reduced liquidity. This event highlighted the vulnerability of this asset class, which lacks underlying value.
"With so many cryptocurrency collapses and shocks, cryptocurrencies are a very important part of the discussion under the #G20India presidency." "We want to create a common framework for all countries to deal with this issue," she said during a discussion at the Peterson Institute for International Economics.
She also stated that the G20 is attempting to bring all countries together to address debt distress in middle- and low-income countries such as Sri Lanka and Ghana.
It was agreed at the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in February to strengthen multilateral coordination by official bilateral and private creditors in order to address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries.
In addition, the World Bank and IMF are hosting a roundtable discussion on Global Sovereign Debt. Initial discussions took place at the G20 FMCBG meeting in Bengaluru, she said, adding that India's G20 presidency will spark discussion and information sharing on this issue, which 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 of last year, World Bank President David Malpass stated that the world's poorest countries owed USD 62 billion in annual debt service, a 35% increase over USD 46 billion in 2021, indicating a greater risk of default.
Malpass also stated that low-income countries are at high risk of or are already in debt distress, and that debt crises are spreading to middle-income countries.
During its G20 presidency, India has pushed for solutions to the exacerbated debt vulnerabilities that developing countries face, owing primarily to ongoing geopolitical tensions and the pandemic.
It is feared that if ignored, developing countries' mounting debt vulnerabilities will cause a global recession, pushing millions into extreme poverty.
Sitharaman also stated that India is carrying forward the agendas of previous G20 presidencies, bringing issues that India considers important to the table, and paving the way for future G20 presidencies to build on the legacy of the G20 India Presidency.
Observing that emerging markets will hold the G20 presidency for three consecutive terms, beginning with Indonesia in 2022, India in 2023, and Brazil next year, she stated that this will bring emerging market perspectives to the forefront as well as the voice of the Global South to the G20 table.
It is feared that if ignored, developing countries' mounting debt vulnerabilities will cause a global recession, pushing millions into extreme poverty.
Sitharaman also stated that India is carrying forward the agendas of previous G20 presidencies, bringing issues that India considers important to the table, and paving the way for future G20 presidencies to build on the legacy of the G20 India Presidency.
Observing that emerging markets will hold the G20 presidency for three consecutive terms, beginning with Indonesia in 2022, India in 2023, and Brazil next year, she stated that this will bring emerging market perspectives to the forefront as well as the voice of the Global South to the G20 table.