G7 financial leaders provide guidance on CBDC design
Central bank digital currencies (CBDCs) must "support and not harm" the ability of monetary regulators to fulfill their responsibilities to ensure monetary and financial stability. This was stated by G7 finance ministers and central bank governors in published recommendations.
The G7 believe that CBDC, if issued, should complement cash by serving as a liquid and secure settlement asset, linked to existing payment systems. To protect user data, such an instrument must meet strict standards of privacy, transparency and accountability.
Any CBDC must be based on a long-standing public commitment to transparency, the rule of law, and sound economic management, the document says.
According to the G7, international coordination and cooperation on these issues will help ensure that innovations in the public and private sectors are effective yet safe for users and the financial system as a whole.
G7 leaders also touched on the regulation of stablcoins. In their view, issuers of such instruments should ensure compliance with regulatory standards and eliminate financial stability risks before they are launched.
The G20 Financial Stability Board made a similar statement in 2020.
None of the G7 member countries has yet launched a national digital currency, but many of them are developing projects in this area.
Recall that in April, the Bank of England and Her Majesty's Treasury created a joint working group to study CBDC. At the same time, the regulator posted seven vacancies for the digital currency research group.