G7 finance officials endorse principles for central bank digital currencies

G7 finance officials endorsed 13 public policy principles. This is for retail central bank digital currencies. The treasury department announced this through their statement. Group of Seven finance ministers and central bankers said in a joint statement that the innovation in digital money and payments has the potential to bring significant benefits. But also raises considerable public policy and regulatory issues.

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. The finance officials met in person, with some joining by video, in Washington during the annual meetings of the International Monetary Fund and World Bank under the leadership of British finance minister Rishi Sunak.

The G7 officials stated that the central bank money in the form of Central Bank Digital Currencies, or CBDCs, would complement cash and could act as a liquid, safe settlement asset and an anchor for the payments system. They said that the principles were meant to support policy and design deliberations within and beyond the G7. No G7 authority has decided to issue a CBDC. They stated such as the careful consideration of the potential policy implications will continue.

They reaffirm that any CBDC should be grounded in their long-standing public commitments to transparency, the rule of law and sound economic governance. Any CBDC must support, and ‘do no harm’ to, the ability of central banks to fulfill their mandates for monetary and financial stability. The G7 officials stressed the importance of rigorous privacy standards, cybersecurity, the need to protect users’ data and transparency on how information will be secured and used.

They reiterated that no global stablecoin project should begin operation. This should be until it addresses legal, regulatory and oversight requirements, echoing a similar statement made by the larger Group of 20 finance officials. Stablecoins are a type of digital coin pegged to traditional currencies.