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G20 Finance Heads Adopt Crypto Policy Roadmap and MDB Reform Agenda in Marrakesh

Crypto Assets, Delhi Declaration, G20, IEG, Marrakesh, MDBs, policy framework

The G20 Finance Ministers and Central Bank Governors (FMCBG) met in Marrakesh, Morocco, on October 13-14, 2023, to discuss the global economic outlook and the challenges posed by the COVID-19 pandemic. They also agreed on a set of actions to enhance the policy framework for crypto assets and to implement the recommendations of the Independent Expert Group (IEG) on multilateral development banks (MDBs).

Crypto Policy Framework

The FMCBG reaffirmed their commitment to the Delhi Declaration, which was adopted by the G20 leaders at their summit in New Delhi in September 2023. The declaration called for a coordinated and balanced approach to regulate and supervise crypto assets, which are decentralized digital assets that use cryptography to secure transactions and control the creation of new units.

The FMCBG welcomed the Synthesis Paper on crypto assets prepared by the International Monetary Fund (IMF) and the Financial Stability Board (FSB), which provided an overview of the current state of play, the main risks and opportunities, and the policy options for the G20 members. The paper also contained an implementation roadmap for the crypto asset policy frameworks, which outlined the steps and timelines for achieving the common goals of macroeconomic and financial stability.

The FMCBG endorsed the roadmap and agreed to work together to ensure effective, flexible, and coordinated implementation of the policy framework with respect to crypto assets. They also agreed to collect and share data on crypto asset activities and to monitor the developments and emerging risks in this fast-evolving sector. They emphasized that crypto assets do not have legal tender status in any jurisdiction and that they should not be used for illicit purposes.

MDB Reform Agenda

The FMCBG also appreciated the work undertaken by the IEG, which was set up by the Indian Presidency in 2023 and co-chaired by NK Singh and Larry Summers. The IEG submitted its report in two parts on how to make MDBs better, bolder, and bigger to stay relevant in the changing global context and to support the developing countries in achieving the sustainable development goals (SDGs).

The first part of the report, which was presented at the Gandhinagar meeting in July 2023, identified three key challenges for MDBs: enhancing their lending capacity with greater resource mobilization, improving their operational effectiveness and efficiency, and strengthening their governance and accountability. The second part of the report, which was submitted at the Marrakesh meeting, laid out a roadmap to implement the triple agenda of reform for MDBs that would triple their annual sustainable lending levels to $390 billion per year by 2030.

The FMCBG noted that transformative changes are required in MDBs’ vision, operating models, and financing capacities. They encouraged MDBs to enhance private capital mobilization through supporting enabling conditions, innovative risk-sharing instruments, and new partnerships to maximize their development impact. They also urged MDBs to implement all appropriate recommendations of the Capital Adequacy Framework (CAF), which was established by the G20 in 2019 to ensure that MDBs have adequate capital buffers to withstand shocks and maintain their credit ratings.

The FMCBG asked the International Financial Architecture Working Group (IFAWG) to deliberate on the IEG recommendations in consultation with MDBs and suggest a way forward for better, bigger, and more effective MDBs, including ways to work together better as a system, in their meeting in April 2024.

The FMCBG communique drew guidance from the G20 New Delhi Leaders Declaration and benefited significantly from the consensus that was reached at the Leaders’ Summit last month. The communique was unanimously adopted at the fourth and final meeting of the G20 FMCBG under the Indian Presidency in Marrakesh on the sidelines of the IMF-WB Annual Meetings.

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