Cryptocurrency Framework To Be Taken Up Under India G20 Presidency : Nirmala Sitharaman

After the recent shocks witnessed in the cryptocurrency market, India's Finance Minister Nirmala Sitharaman stated that India's G20 presidency wants to create a standard framework for all countries to deal with risks related to cryptocurrencies.

The collapse of FTX last year and its dispute with Binance led to a significant market sell-off and decreased liquidity. As a result of this incident, the world became aware of this asset class's vulnerability since it lacks 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 made this statement at a talk at the Peterson Institute for International Economics.

She said that the G20 is attempting to unite all nations to confront the debt crisis in middle- and low-income countries like Sri Lanka and Ghana.

In order to address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries, it was decided to strengthen multilateral coordination by official bilateral and private creditors during the first G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in February.

An IMF and World Bank roundtable discussion on global sovereign debt is also taking place. Early discussions were place during the G20 FMCBG meeting in Bengaluru, she added, that the topic would be discussed and shared under India's G20 presidency, and it will move ahead in a constructive way.

"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," said Sitharaman.

The poorest nations in the world owe USD 62 billion in yearly debt service, up 35% from USD 46 billion in 2021, according to World Bank President David Malpass, raising the possibility of default.

Malpass said that middle-income nations are now experiencing debt crises as well as being at high danger of or already experiencing financial hardship.

India has been pushing for solutions to the worsening debt vulnerabilities that poor countries are experiencing during its G20 presidency, primarily because of the ongoing geopolitical tensions and the pandemic.

If ignored, it is believed that emerging countries' growing debt vulnerability may lead to a worldwide recession and plunge millions into terrible poverty.

According to Sitharaman, India is advancing the agendas of previous G20 presidencies, bringing up topics that it deems crucial, and paving the way for subsequent G20 presidencies to build on the legacy of the G20 India Presidency.

She noted that developing economies will have the G20 presidency for three consecutive years starting with Indonesia in 2022, India in 2023, and Brazil the following year. She said that this will elevate emerging market perspectives and provide the Global South's voice a seat at the G20 table.

She stated that foreign investments have continued to flow into India in regard to the business climate in the nation. "I'd advise the potential investors to visit India and see what's going on instead of listening to opinions being formed by individuals who haven't been there but are still making reports,"

While discussing India's goals for the ensuing five years, the finance minister stated,  "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."

Important News and Blog Tags for Readers

#G20India presidency

Deal with risks related to cryptocurrencies

Collapses and shocks in cryptocurrencies

Develop a common framework for all countries

Peterson Institute for International Economics

IMF and World Bank roundtable discussion

G20 FMCBG meeting in Bengaluru

legacy of the G20 India Presidency

World Bank President David Malpass