The Group of Seven (G7) developed economies discussed the central bank’s digital currency (CBDCs) this week and concluded that they should “do no harm” and meet stricter standards.
G7 finance leaders discussed the central bank’s digital currency in Washington on Wednesday and approved a public policy policy on its implementation.
The G7, which is made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, binds any newly launched CBDC to “not harm” 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 in this regard will help ensure that public and private sector innovations will provide domestic and cross-border benefits while safe for users and the wider financial system.”
It noted that CBDCs would be a cash supplement and could act as a liquid, secure settlement asset as well as anchor existing payment systems. The statement added that digital currencies must be energy-efficient and fully inter-operative on an inter-border basis.
The leaders of the G7 nations have reaffirmed that they have a shared responsibility to reduce the “harmful spread” to the international financial and financial system.
The statement said the CBDC’s issuance “should be based on the public’s long-term commitment to transparency, the rule of law and sound economic governance”. A G7 country has not yet issued a CBDC but several, like the UK, are actively researching technology and economic impact.
Related: Cointelegraph Forecast for the first 5 CBDCs of 2021-2022
Echoing similar statements from the larger G20, they reiterated that work on a global sustainable project should not begin until it addresses legal, regulatory and oversight requirements. The comments could be a reference to Facebook’s planned Dime cryptocurrency, which has raised red flags for financial leaders and central bankers.
The United States has been dragging its feet with the CBDC plan and the Federal Reserve has remained highly skeptical about the digital dollar. According to a report by Cointelegraph in September, America is in danger of falling behind technologically and financially if it does not take its own CBDC seriously.
China is already well ahead of the pack with its digital yuan, and its latest crackdown on crypto could be part of its grand plan to further improve and regulate central bank financial flows.
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