Ban on private cryptocurrencies Regulating cryptocurrencies is a priority area for India: IMF

Disagreements once again cropped up among the Group of 20 (G20) nations, mainly over restructuring debt for distressed economies, the chief of the International Monetary Fund (IMF) said on Saturday here.

On the table as an option is a ban on private cryptocurrencies. Regulating cryptocurrencies is a priority area for India, which IMF chief Kristalina Georgieva agreed with.

"We have to differentiate between central bank digital currencies that are backed by the state and stable coins, and crypto assets that are privately issued," Georgieva said 

There has to be a very strong push for regulation... if regulation fails, if you're slow to do it, then we should not take off the table banning those assets, because they may create financial stability risk."

Strong regulatory framework needed for cryptocurrencies

US Treasury Secretary Janet Yellen said she had not suggested the "outright banning of crypto activities, but it was critical to put in place a strong regulatory framework."

"On debt restructuring, while there are still some disagreements, we now have the global sovereign debt roundtable with consideration of all public and private creditors," the IMF chief tsaid after chairing the roundtable with Union Finance Minister Nirmala Sitharaman 

Debt restructuring

Debt restructuring is a major issue as India’s neighbours, including Sri Lanka, Bangladesh, and Pakistan, are seeking urgent IMF funds because of an economic slowdown caused by the Covid-19 pandemic and the Russia-Ukraine war.

However, China disagreed on the causes of the financial mess in these countries. As the world’s largest bilateral creditor, China urged the group of big economies to conduct a fair, objective and in-depth analysis of the causes of global debt issues.

This comes amid a pressure on lenders to take a large haircut, or accept losses, on loans.

At the end of the meeting, there were no deliverables with Yellen terming the conclave as mostly organisational. "We certainly had that agreement that this is a useful forum," Yellen said. "We look forward to participating in it.