G20: Crypto Framework, Financial Inclusion May Emerge As India's Legacy, Says Official

A common framework on cryptocurrency and a financial inclusion action plan leading up to 2026 could emerge as India's legacy from the G20 presidency, according to a senior official.

However, differences on the language of war and on food and energy insecurities continue to be topics of disagreement among delegations, the official said, speaking on the condition of anonymity.

As the chair, India's G20 finance track agenda included 27 deliverables—10 of which have been endorsed and the other 17 have been welcomed by G20 delegations, the official said.

There has been a positive movement on all deliverables with the exception of a language of consensus on the war and food insecurity from Russia, according to the person quoted above.

India's finance track objectives include increasing the lending capabilities of multilateral development banks, financing the cities of tomorrow, and putting in place an action plan for technical assistance on sustainable finance and debt resolution for distressed countries.

The G20 finance track has laid down the roadmap and building blocks of a common framework around the treatment of cryptocurrencies, which will now be presented at the leaders' summit starting Sept. 9, the person quoted above said.

The next step on cryptocurrencies would be implementing the common framework developed by the International Monetary Fund, the Financial Stability Board, and the Bureau of Indian Standards, the person said.

The joint synthesis paper on cryptocurrency by the IMF-FSB has also been circulated among delegations. India has attached a presidential guidance note on the same, which summarises the IMF-FSB report, according to the official.

Under its chairmanship, India has laid down a Financial Inclusion Action Plan for 2024–2026, which will spell out policy recommendations for further advancements of digital public infrastructure and state how further productivity gains can be achieved.

India's presidency will leave a strong legacy on DPI and financial inclusion that will now be carried on to the next presidency, the official said.

Climate financing and transition assessment have also remained high on India's list of priorities. The G20 members have agreed that the energy transition (from fossil fuels) will be inclusive, swift, cooperative, and customised, the person said.

India has submitted a report on macroeconomic risks stemming from climate change and transition pathways, endorsed by the Finance Ministers and Central Bank Governors.

This report would allow countries to assess and choose their own energy baskets and transition pathways by offering various pricing and non-pricing tools.

India has also put forth a framework for financing the cities of tomorrow, which, after the assent of G20 leaders, will be applied as pilot cases in select cities by multilateral banking institutions.

A financial model/tool has been developed by India that will serve as a customisable tool for assessing and enhancing the institutional capacity of urban financing, the person quoted above said.

On leveraging multilateral bank finance and increasing their lending room, India had commissioned an expert group co-convened by NK Singh and Larry Summers, the former U.S. Secretary of Treasury.

The export group submitted its first report on multilateral bank reform in July. The second part of the report is expected to be tabled in October in Morocco, when the last FMCBG meeting under India's presidency will take place.

Previously, a G20 independent review of the 'Multilateral Development Banks Capital Adequacy Frameworks' had been developed based on the leaders' meeting in Bali in November 2022 and updates from MDBs in spring 2023. It was proposed that an additional lending room of $200 billion could be made available by MDBs in the next 10 years.

A sovereign debt roundtable co-chaired by G20 Chair India, the IMF, and the World Bank was also formed at the beginning of the presidency to discuss alleviating the debt distress of vulnerable countries.

The grouping has made progress on a common framework and is close to finalising the debt relief for Zambia, Ghana, and Ethiopia under the same, the official quoted above said. The debt relief for Sri Lanka is almost finalised as well, though it will be outside the common framework as it's a middle-income country, the person said.

The official noted that the common framework has faced pushback from China over including climate references.