Financial leaders from the G7 agree that CBDCs would complement cash and should not be detrimental to the monetary system.
The Group of Seven advanced economic nations discussed central bank digital currencies (CBDC), concluding that they should “do no harm” and meet rigorous standards. Finance leaders from the G7 met in Washington on Oct. 13 to discuss CBDCs and endorsed 13 public policy principles regarding their implementation. The G7, which comprises Canada, France, Germany, Italy, Japan, the U.K., and the U.S., noted that newly launched CBDCs should “do no harm” to the central bank’s ability to maintain financial stability.
“Strong international cooperation will deliver domestic and cross-border benefits.”
In a joint statement, G7 finance ministers and central bankers said: “Strong international coordination and cooperation on these issues helps to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the wider financial system.” It added that CBDCs would complement cash and act like liquid, safe settlement assets and anchoring existing payments systems. Digital currencies must be energy efficient and fully interoperable on a cross-border basis, the G7 leaders added.
A G7 nation has yet to issue a CBDC.
Leaders from the G7 nations noted that they share a responsibility to minimize “harmful spillovers to the international monetary and financial system.” CBDC issuance should be “grounded in long-standing public commitments to transparency, the rule of law, and sound economic governance,” the statement continued. A G7 nation has yet to issue a CBDC, but several such as the United Kingdom, are actively researching the technology and economic impacts. G20 leaders also made a similar statement stating that no global stablecoin project should begin operation until it addresses legal, regulatory, and oversight requirements. The comments may be about Facebook’s planned Diem cryptocurrency, which has raised red flags for financial leaders and central bankers.