Banning private cryptocurrencies should be an option, said IMF Managing Director Kristalina Georgieva on Saturday, on the sidelines of a G20 meeting. IMF chief added that there are some disagreements among nations over restructuring debt for distressed economies.
Speaking to reporters on the sidelines of the G-20 meeting of Finance Ministers and Central Bank Governors (FMCBG) in Bengaluru, Georgieva also said that there are some disagreements between the nations on the issue of debt restructuring of low and middle income countries.
“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. Second, there has to be a very strong push for regulation. And third, if regulation fails, if you’re slow to do it, then we should not take off the table or banning those assets, because they may create financial stability risk,” she said.
Earlier, IMF Managing Director Kristalina Georgieva, after co-chairing a meeting with Indian Finance Minister Nirmala Sitharaman, told reporters that banning crypto should be an option. Indian Prime Minister Narendra Modi’s government has for several years debated drafting a law to regulate or even ban cryptocurrencies but has not made a final decision. The Reserve Bank of India has said that cryptocurrencies should be banned as they are akin to a Ponzi scheme.
Earlier on Thursday, the IMF laid out a nine-point action plan for how countries should treat crypto assets, with point number one a plea not to give cryptocurrencies legal tender status. Such efforts have become a priority for authorities, the fund said, after the collapse of a number of crypto exchanges and assets over the last couple of years, adding that doing nothing was now “untenable”.
There is a broad agreement on debt management and debt relief that these are very important instruments to provide financial support to most vulnerable countries. Discussions are ongoing and I think we are making progress on the communique with a will to ensure the multilateral framework provides clarity and certainty on how the debt management process is going to be conducted,” Calvino said.
Earlier in the week, the IMF chief had said that about 15 per cent of low-income countries are in debt distress and an additional 45 per cent are at a high risk of debt distress. Among emerging economies, about 25 per cent are at high risk and facing “default-like” borrowing spreads, she said. US Treasury Secretary Janet Yellen had also stated a few days ago that the US would push for all bilateral official creditors, including China, to participate in meaningful debt treatments for developing countries and emerging markets in distress.
In an interview with news agency PTI, the IMF MD said that India’s performance has been quite impressive. For this year, the IMF expects India to retain a high growth rate, 6.8 per cent for the year that ends in March. Pakistan Prime Minister Shehbaz Sharif on Friday said that the crisis-hit country has to ‘unwillingly’ accept the strict conditions of the IMF deal to provide a lifeline for an economy in turmoil.
Pakistani authorities have been negotiating with the International Monetary Fund (IMF) since early February over the policy framework and are hoping to sign a staff-level agreement that will pave the way for more inflows from other bilateral and multilateral lenders.
