G7 finance leaders lay out guidelines for central bank digital currencies

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October 13 (Businesshala) – The Group of Seven advanced economies said on Wednesday that any digital currency issued by a central bank should “support and do no harm” to a bank’s ability to fulfill its mandate on monetary and financial stability. , and should also meet stringent standards.

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If issued, a central bank digital currency (CBDC) would complement cash and could act as a liquid, secure settlement asset and an anchor for payment systems, the G7 nations said after their meeting on Wednesday. said.

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But currencies must be issued in a way that does not violate central banks’ mandates, and meet stringent standards of privacy, transparency and accountability to protect user data, he said.

“Any central bank digital currency (CBDC) must be based on long-standing public commitments to transparency, the rule of law and sound economic governance,” the G7 finance leaders said in a statement.

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While CBDCs can increase cross-border payments, G7 nations said they have a “shared responsibility to reduce harmful spillovers to the international monetary and financial system.”

Global central banks have stepped up efforts to modernize financial systems and develop their own digital currency to accelerate domestic and international payments.

China has been a leader in the issuance of digital currency, while the G7 central banks are working to establish common standards towards issuance of CBDCs as some move forward with experiments.

Reporting by Leika Kihara in Tokyo; Editing by Christopher Cushing and Leslie Adler

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