G7 finance ministers and central bank governors have agreed to work towards general principles for state-backed digital currencies and to publish their findings this year. He added that these digital currencies “can act as an anchor for a liquid, secure settlement asset and payment system.”
G7 Central Bank laying down general rules for digital currencies
The G7 finance ministers met in London on June 4-5, marking the first face-to-face meeting of finance chiefs since the G20 finance leaders met in Saudi Arabia in February last year. The meeting took place around 28 May in which G7 finance ministers and central bank governors attended. The G7 includes the US, UK, Japan, Germany, France, Italy and Canada.
Among the topics they discussed was the central bank digital currency (CBDC), according to the G7 Finance Ministers and Central Bank Governors Communique published on Saturday.
“Innovation in digital currency and payments has the potential to bring significant benefits, but it could also raise public policy and regulatory issues,” the release said.
Noting that the G7 central banks are “exploring the opportunities, challenges, as well as the monetary and financial stability implications of central bank digital currencies,” the finance leaders declared: “We work closely as finance ministries and central banks. are committed to, within our respective mandates, on their broader public policy implications.” He elaborated:
We note that any CBDC, in the form of central bank money, can act as a liquid, secure settlement asset and an anchor for a payment system.
“Our aim is to ensure that CBDCs are based on longstanding public sector commitments to transparency, rule of law and sound economic governance,” he continued.
“CBDCs must be flexible and energy efficient; can support innovation, competition, inclusion, and enhance cross-border payments; they must operate within an appropriate privacy framework and minimize spillovers,” he emphasized:
We will work towards general principles and publish the findings later in the year.
The heads of the International Monetary Fund (IMF), the World Bank Group, the Organization for Economic Co-operation and Development (OECD), the Eurogroup and the Financial Stability Board (FSB) also participated in the G7 finance heads’ meetings.
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