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G7 Leaders Issues New Guidelines for Central Bank Digital Currencies

cryptoknowmics.com 14 October 2021 10:30, UTC
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The financial leaders from G7 nations have endorsed 13 public policy principles for retail central bank digital currencies, saying they should be grounded in transparency, the rule of law, and sound economic governance. The G7 countries include Canada, France, Germany, Italy, Japan, UK, and the U.S.

G7 Finance Leaders Issue Guidelines on CBDCs

On October 13, leaders from the G7 nations gathered in Washington to discuss Central Bank Digital Currencies (CBDC) and approved 13 public policy principles regarding its implementation.

The leaders argued that they had a shared responsibility to minimize “harmful spillovers to the international monetary and financial system.” According to them, a CBDC issuance should be “grounded in long-standing public commitments to transparency, rule of law, and sound economic governance.”

“Strong international coordination and cooperation on these issues help to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the broader financial system.”

Furthermore, the leaders requested that the newly launched CBDCs “do no harm” the bank’s capacity and maintain financial stability. While A G7 nation is yet to issue a CBDC but several such as the United Kingdom are actively researching the technology and economic impacts.

CBDCs Need to be Energy-Efficient

The leaders further added that such a move would have to be aligned with rigorous privacy standards, accountability on data protection for users, and transparency on the use and storage of information in order to instill user trust including being energy-efficient.

"Any CBDC ecosystem must be secure and resilient to cyber, fraud and other operational risks, must address illicit finance concerns, and be energy efficient."
The leaders also touched on stablecoins, saying they need to be held to high regulatory standards, "A stablecoin widely used as a store of value or means of payment would pose significant risks to financial stability without appropriate regulation.”

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