G7 Leaders Call Out For These Guidelines On CBDC
Countries all over the world have been gearing up to develop and launch their own central bank digital currencies (CBDC). In a recent development, finance officials from the Group of Seven advanced economic nations worked towards guidelines in this regard.
They concluded that CBDCs should “support and do no harm” to the bank’s ability to fulfil its mandate on monetary and financial stability, while meeting existing rigorous standards.
The G7 leaders met on October 13 to discuss the emerging technology among other issues, coming up with 13 public policy principles regarding the implementation of CBDCs.
The group, which consists of Canada, France, Germany, Italy, Japan, the U.K., and the U.S., issued a joint statement by its finance ministers and central bankers, noting, “Strong international coordination and cooperation on these issues helps to ensure that
They further claimed that the issuance of these currencies must not infringe upon the mandates of central banks. It should also meet standards of privacy, transparency, and accountability for the protection of user data.
Further, the guidelines also stated that if these digital currencies are issued, they would be required to complement cash and act like liquid and safe settlement assets, while also anchoring existing payments systems. Additionally, CBDCs must also be energy efficient while operating in an open, transparent, and competitive manner.
The statement also underscored the importance of full interoperability on a crossborder basis along with the group’s responsibility towards minimizing “any harmful spillovers to the international monetary and financial system.”
Out of the nations that are part of the G7 group, none has yet been able to overtake China in terms of CBDC development.
However, both, “Britcoin” and “Digital Dollar” have begun to go through the first stages of their development process. While the Bank of England recently issued a report deliberating on the need for CBDCs, a white paper from the American Federal Reserve is expected to be published this month.