With debt soaring, aid budgets shrinking, and the climate crisis escalating, the need for bold solutions is urgent. 2025 presents a crucial window to advance Special Drawing Rights (SDRs), a uniquely efficient tool to boost liquidity in times of crisis. SDRs will be at the centre of this year’s discussions at the G20, the United Nations’ Financing for Development (FfD) process, and the upcoming Hamburg Sustainability Conference. Since the unprecedented USD 650 billion SDR issuance in 2021, calls for their innovative use have grown, but Germany remains cautious. Could SDRs be a game changer for sustainable finance? In this brief, we explore how rechannelling SDRs through IMF funds and MDBs, SDR bonds, and a new issuance can unlock billions, without burdening taxpayers. We address key concerns raised by German policymakers and outline an ambitious German SDR strategy. Now is the time to seize this opportunity and ensure the untapped potential of SDRs is fully realised!
