The G20, an intergovernmental forum of 19 countries and the European Union, has announced its intention to develop a unified framework to help all nations tackle the risks associated with cryptocurrency investments.
India, under its presidency of the G20, has called for coordinated global crypto policies to tackle the ecosystem collapses that have affected investors worldwide.
The finance minister of India, Nirmala Sitharaman, believes that reforms must be coordinated globally to address the worldwide impact of cryptocurrencies.
G20 seeks to develop a common framework for crypto policy
Speaking at the Peterson Institute for International Economics in Washington DC, Sitharaman highlighted the importance of a coordinated global effort in developing a common framework to help all countries deal with cryptocurrency-related risks. She stated:
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.
The G20’s common framework will aim to reduce the vulnerability of the asset class, which currently lacks underlying value. The forum’s goal is to create a unified policy that can be implemented across all jurisdictions to protect investors and create stability in the crypto market.
With the recent struggles of the El Salvadoran economy and the importance of an asset like Bitcoin in reducing the impact of hyperinflation and dependence on the U.S. dollar, the G20’s unified policy will help reduce risk and increase stability.
India’s G20 presidency will end on November 30, 2023, leaving approximately seven months for the group of 20 nations to develop blanket crypto reforms that can be implemented across jurisdictions.
With a common framework, countries can work together to combat cryptocurrency vulnerabilities and provide protection to investors worldwide.
Debt distress in middle-income and low-income countries
India’s G20 presidency also aims to unite global economies to fight debt distress and hyperinflation in smaller economies such as Sri Lanka and Ghana.
Sitharaman disclosed the forum’s aim to address debt distress in middle-income and low-income countries, which will be a topic of discussion during the G20 presidency.
Multilateral institutions are coming up with resolutions for debt-laden countries in 3 to 5 years time, and the G20 will create a discussion and sharing of information on this issue.
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 International Monetary Fund (IMF) are holding a roundtable on Global Sovereign Debt, which will create a discussion and sharing of information on the issue.
In December last year, World Bank President David Malpass said the world’s poorest countries owed $62 billion in annual debt service, a 35% growth over $46 billion in 2021, triggering a higher risk of defaults.
The G20’s focus on multilateral coordination will bring together nations to create policies that will reduce risks and increase stability in the global economy.
