G7 RELEASES GUIDELINES FOR CENTRAL BANK DIGITAL CURRENCIES

Thu 14 October 2021:

The G7 finance ministers announced guidelines for Central Bank Digital Currencies (CBDCs) on Thursday, that “CBDCs must not compromise financial and monetary stability; should coexist with, and complement existing forms of money, and promote innovation and efficiency in payments.”

The G7 countries’ joint report, titled Public Policy Principles for Retail CBDCs, recalls that the growing trend in the use of digital currency surged throughout the pandemic period, said a retail CBDC should be a digital form of central bank money.

CBDCs are not crypto assets, which are highly volatile and not issued by central banks, according to the statement.

It also said the CBDC could be an important instrument for central banks in the future and it should be designed for meeting future payment needs.

“The international use of CBDC, including for cross-border payments, could bring important benefits, but if CBDC design is not carefully calibrated, might also pose unintended consequences,” it highlighted.

The G7 principles were divided into two categories. The first category includes foundational issues, legal and governance frameworks, data privacy, competition, operational resilience and cybersecurity, illicit finance, spillovers, and energy and environment.

The second category comprises opportunities, financial inclusion, payments to and from the public sector, cross-border functionality, and international development.

To modernize financial institutions and speed up domestic and international payments, global central banks have increased their efforts to build their own digital currencies.

China has been leading the pack toward issuing a digital currency, while G7 central banks have been working to set common standards toward issuing CBDCs as some proceed with experiments.

_____________________________________________________________________________

FOLLOW INDEPENDENT PRESS:

TWITTER (CLICK HERE)
https://twitter.com/IpIndependent