In a landmark development leading up to the G20 summit, sources tell CNBC-TV18 that the leaders are on the cusp of a significant decision that could reshape the crypto landscape. Sources say the Indian Presidency is batting for a unified template for regulating cryptocurrency and the G20 leaders are poised to give their nod to the foundational principles governing crypto assets. The move will signify a critical step towards creating a coordinated global regulatory framework for the cryptocurrency market.
Official sources disclose that international organisations like the International Monetary Fund (IMF) and the Financial Stability Board (FSB) have jointly produced a groundbreaking paper advocating for the comprehensive regulation of crypto and not a ban. Largely, this would be in sync with the India Presidency’s approach.
This document is expected to serve as a blueprint for the upcoming discussions at the G20 summit.
One of the standout achievements of this summit, notably for India, is the successful inclusion of crypto-related matters on the G20 agenda. This move underscores the growing recognition of cryptocurrencies as a significant economic force.
Revolutionising Multilateral Development Banks (MDBs)
Leaders at the G20 summit are calling for a transformative shake-up of Multilateral Development Banks (MDBs) to address emerging challenges and priorities. Discussions have centred on the need to align MDBs with newer issues such as digital public infrastructure and climate action.
Key insiders say that MDBs are being encouraged to engage in comprehensive dialogues to determine the scope of implementation for these transformative changes. Additionally, a review of the capital adequacy framework for MDBs is underway, with the potential to unlock an additional $200 billion in lending capacity over the next decade.
Experts assert that there is a pressing need to make MDBs more adaptable in the modern era, shedding their 20th-century image to better address the evolving global landscape.
Tackling Global Debt Vulnerability
Sources also indicate that discussions on managing global debt vulnerability are ongoing. China has expressed reservations regarding a climate-resilient clause as part of debt restructuring negotiations. However, progress has been made in finalising debt packages for countries like Ghana, Zambia, and Ethiopia, with the exception of Sri Lanka, which falls outside the common framework.
India's presidency has garnered praise for its proactive approach to addressing the debt vulnerability of weaker nations. The Indian Presidency further wants to enhance the effectiveness of the common debt restructuring framework and make it more time-bound.
Macro Economic Impact of Climate Change & Transition
Divergent views have emerged on the macroeconomic impact of climate change and transition. Some countries have pushed back on the reduction of fossil fuels, but the same bloc of nations remains sceptical about the adoption of carbon pricing measures.
India's presidency has played a pivotal role in fostering a global policy conversation on climate transition, assuaging concerns raised by Saudi Arabia regarding a "just transition." The G20 report is set to provide country-specific assessments with tailored solutions, allowing for a more customised approach rather than a one-size-fits-all strategy.
It is noteworthy that countries are being granted the flexibility to explore a range of options, including those not necessarily tied to pricing mechanisms.
G20's Commitment to Financial Inclusion
The G20 summit has laid out a comprehensive action plan on financial inclusion, slated for the years 2024-2026. This Financial Inclusion Action Plan is seen as India's enduring legacy within the G20 framework.
As the summit unfolds, the world eagerly awaits the outcomes of these crucial discussions that have the potential to reshape global finance, governance, and economic sustainability. Stay tuned for more updates as the G20 leaders deliberate on these pressing global issues.
First Published: Sept 8, 2023 10:41 AM IST
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