On October 17-18, 2019, Deputy Governor Dao Minh Tu of the State Bank of Vietnam (SBV) attended the G20 Finance Ministers and Central Bank Governors Meeting, which was held on the sidelines of the IMF/WBG 2019 Annual Meetings in Washington D.C, the USA.
The participants in the Meeting were updated on the developments, progress and action plans implemented after the G20 Summit held in June 2019 in Osaka, Japan in accordance with the priority targets in the G20 2019 Financial Process, including: (1) Global economy, risks and challenges, (2) Towards strong growth, and (3) Coping with structural changes by innovations and globalization.
The participants also shared ideas about the assessments and forecasts of the IMF in the World Economic Outlook Report published in October 2019 on the economic developments and the negative economic prospects due to the escalation of the global trade tensions and the geopolitical instabilities. Besides, the Meeting also highlighted the increasing challenges from the participation of large technology corporations in the financial sector (also known as Bigtech).
The Meeting announced a media release on stablecoin, which was an initiative raised by the G20 Leaders at the G20 Osaka Summit in June 2019, with a view to building a framework or a set of principles for the global management of digital currencies such as Facebook's Libra. In the media release, the G20 countries agreed on the need of establishing a set of rules to manage and identify the risks of cryptocurrencies, and affirmed that the risks related to cryptocurrencies, systematic risks and risks of money laundering and terrorist financing need to be addressed before implementing the global frameworks/rules on cryptocurrencies. The G20 Task Force will carry out this study and propose a framework for the management of digital currencies, which is expected to be completed by 2020.
In its statement on international tariffs, the G20 welcomed the progress of overcoming difficulties in tax in the Base Erosion and Profit Shifting (BEPS) framework. The Meeting supported the OECD's proposal to build global tax rules for revenue-based technology corporations in countries where they have no physical presence.
This was the last meeting of the 2019 G20 Financial Process chaired by Japan and the second time Vietnam has participated in the G20 as an observer. The financial process is considered to be the core and most important channel of cooperation within the framework of the G20 countries, which is a forum for regulators of global financial centers, and plays an important role in establishing the principles for the global financial activities, connecting the action plans of the international financial institutions with the developed, developing and underdeveloped countries.
Three of the ASEAN countries have participated in the 2019 G20 Financial Process, namely Indonesia, Singapore and Vietnam. The participation in the G20 process is an important preparatory step for Vietnam in general and the SBV in particular in developing and implementing the priorities for banking and financial cooperation in 2020 when Vietnam assumes the ASEAN Chairmanship.
Le Hang