The International Monetary Fund’s chief says a crypto ban should be on the table in debt restructuring talks with indebted nations, amid fears of the potential disruptive impact of private digital currencies on world markets.
The ban plan comes with Sri Lanka, Bangladesh and Pakistan seeking urgent IMF funds as pressure increases on lenders like China to accept losses on their loans.
Speaking on Saturday on the sidelines of a G20 meeting taking place in Bengaluru, India, IMF Managing Director Kristalina Georgieva suggested banning private cryptocurrencies should be an option.
“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,” Georgieva said.
“There has to be 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.”
China, the world’s largest bilateral creditor, urged G20 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 on loans.
“On debt restructuring, while there are still some disagreements, we now have the global sovereign debt roundtable with consideration of all public and private creditors,” Georgieva told reporters after the roundtable 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.”
- Reuters with additional editing by Sean O’Meara