IMF flags debt restructuring hurdles, says banning crypto should be an option

BENGALURU, India – There are some disagreements over restructuring debt for distressed economies, the chief of the International Monetary Fund (IMF) said on Saturday, on the sidelines of a G-20 meeting, adding that banning private cryptocurrencies should be an option.

India’s G-20 presidency comes at a time when its South Asian neighbours Sri Lanka, Bangladesh and Pakistan are

seeking urgent IMF funds due to an economic slowdown

caused by the Covid-19 pandemic and the Russia-Ukraine war.

China, the world’s largest bilateral creditor, urged G-20 nations on Friday to conduct a fair, objective and in-depth analysis of the causes of global debt issues as clamour grows for lenders to take a large haircut, or accept losses, on loans.

“On debt restructuring, while there are still some disagreements, we now have the global sovereign debt round-table with consideration of all public and private creditors,” IMF managing director Kristalina Georgieva told reporters after the round-table she co-chaired with Indian Finance Minister Nirmala Sitharaman.

“We just finished a session in which it was clear that there is a commitment to bridge differences for the benefit of countries.”

Apart from restructuring debt,

regulating cryptocurrencies

is another priority area for India, which Ms 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,” she 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.” REUTERS