G20 under India can make progress in debt relief, crypto regulation, climate finance: Gita Gopinath

Gita Gopinath, deputy managing director of International Monetary Fund (IMF) has said G-20 under India’s presidency can make concrete progress in three areas -- debt relief, crypto regulations, and climate finance. The development comes as delegates from other G20 countries are on a three-day visit from December 13 to December 16 to India for a G20 meeting. This is the first time India is hosting the development working group (DWG) after assuming the G20 presidency on December 1. 

“I see three areas where we can make concrete progress under India’s presidency. The first area is debt. We have a large number of low-income countries that are currently in debt distress. And while we have a G20 framework to help with debt resolution, we absolutely need to improve the strength of the mechanism and need much more timely resolution. So that’d be an area of clear progress,” Gopinath said in a video shared on Twitter.

“The second would be the area of crypto regulations. After the crypto meltdown we have seen recently, it is clear that we need international standards on regulation. Progress on that front would be accomplished in 2023 would be a concrete outcome,” she added.

Gopinath’s statement regarding crypto regulations comes amid the collapse of Sam Bankman-Fried-led FTX that left thousands of crypto creditors and investors in limbo. The embattled FTX, which was the world’s second-largest crypto exchange until last month, already owes $3.1 billion to 50 of its largest creditors. Its fall has again started the debate around stricter crypto regulations globally. 

In India, the government is already planning to implement tighter crypto reforms. In Budget 2022-23, the central government proposed to tax the gains made on virtual digital assets at 30% and 1% TDS on the transfer of cryptos to discourage crypto transactions. 

Regarding the climate change, Gopinath said developing countries need higher financing to adapt to climate change and to contribute to climate change, which can be the third area of progress. 

“And lastly is climate finance. For developing countries to adapt to climate change, to contribute to climate mitigation, they would need much higher climate financing. And that’s a third area where concrete progress can be made,” she said. 

In November, chief economic advisor V Anantha Nageswaran said after assuming G20 presidency, India’s focus will be on macroeconomic vulnerabilities, food and energy security, and trans-border challenges like regulation of virtual assets, among others.

“India’s G20 Presidency begins in the next thirty days. The global economy is subject to headwinds, and uncertainties. We are dealing with unknown unknowns and not known unknowns. G20 presidency will focus on key issues on macroeconomic vulnerabilities in the near term which deal with food and energy security. These challenges have emerged partly because of the long-standing under-investment in energy infrastructure, but also geo-political developments,” Nageswaran said.