The Group of Seven Advanced Economic Countries are discussing central bank digital currencies (CBDCs) this week, concluding that they should “do no harm” and meet stringent standards.
G7 finance leaders met in Washington on 13 October to discuss central bank digital currencies and endorse 13 public policy principles regarding their implementation.
The G7, which includes Canada, France, Germany, Italy, Japan, the UK and the US, mandated that any newly launched CBDC must “do no harm” to the ability of central banks to maintain financial stability. In a joint statement, G7 finance ministers and central bankers said:
“Strong international coordination and collaboration on these issues helps ensure that innovations from the public and private sectors will deliver domestic and cross-border benefits while remaining safe for users and the wider financial system.”
It added that the CBDC would complement cash and could act as a liquid, secure settlement asset besides anchoring existing payment systems. Digital currencies should be energy efficient and fully interoperable on a cross-border basis, the statement said.
The leaders of the G7 nations reaffirmed that they had a shared responsibility to reduce “harmful spillovers to the international monetary and financial system”.
The statement continued, issuing CBDCs “must be based on long-standing public commitments to transparency, rule of law and sound economic governance.” The G7 nation has yet to issue a CBDC, but many, such as the United Kingdom, are actively researching the technology and economic implications.
related: Cointelegraph predictions for the first 5 CBDCs from 2021–2022
Echoing a similar statement made by the larger G20, he reiterated that no global stablecoin project should start unless it meets legal, regulatory and oversight requirements. The comments could be in reference to Facebook’s planned Dime cryptocurrency which has raised red flags for financial leaders and central bankers.
The US is dragging its feet with CBDC plans and the Federal Reserve is highly skeptical about the digital dollar. As Cointelegraph reported in September, there is a danger of being left behind technically and financially if the US does not begin to seriously consider its own CBDC.
China is already well ahead of the pack with its digital yuan, and its latest crackdown on crypto is likely part of its grand plans to further boost and control central bank monetary flows.