Group of Seven advanced economic nations has been discussing central bank digital currencies (CBDCs) this week, concluding that they should “do no harm” and meet rigorous standards.
Finance leaders from the G7 met in Washington on Oct. 13 to discuss central bank digital currencies and endorsed 13 public policy principles regarding their implementation.
The G7, which comprises Canada, France, Germany, Italy, Japan, the U.K., and the U.S., mandated that any newly launched CBDCs should “do no harm” to the central bank’s ability to maintain financial stability. In a joint statement, G7 finance ministers and central bankers said:
“Strong international coordination and cooperation on these issues helps to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the wider financial system.”
It added that CBDCs would complement cash and could act like liquid, safe settlement assets in addition to anchoring existing payments systems. Digital currencies must be energy efficient and fully interoperable on a cross-border basis, the statement added.
Leaders from the G7 nations confirmed that they had a shared responsibility to minimize “harmful spillovers to the international monetary and financial system.”
CBDC issuance should be “grounded in long-standing public commitments to transparency, rule of law, and sound economic governance,” the statement continued. A G7 nation has yet to issue a CBDC but several such as the United Kingdom are actively researching the technology and economic impacts.
Echoing a similar statement made by the larger G20, they reiterated that no global stablecoin project should begin operation until it addresses legal, regulatory, and oversight requirements. The comments may be in reference to Facebook’s planned Diem cryptocurrency which has raised red flags for financial leaders and central bankers.
The U.S. has been dragging its feet with CBDC plans and the Federal Reserve remains highly skeptical about digital dollars. As reported by Cointelegraph in September, America is in danger of being left behind technologically and financially if it doesn’t start seriously considering its own CBDC.
China is already way ahead of the pack with its digital yuan, and its latest crackdown on crypto is likely to be part of its grand plans to further promote and control central bank monetary flows.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.