G7 leaders release instructions for central banks on digital currencies.

This week, the Group of Seven advanced economies discussed central bank digital currencies (CBDCs), saying that they should “cause no harm” and adhere to strict guidelines.

On Oct. 13, G7 finance ministers gathered in Washington to discuss central bank digital currencies and supported 13 public policy guidelines for their adoption.

The G7 countries, which include Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, agreed that any new CBDCs should “cause no harm” to the central bank’s authority to preserve financial stability.

G7 finance ministers and central bankers issued a joint statement saying: “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.”

CBDCs would be a supplement to cash, acting as liquid, safe settlement assets as well as anchoring existing payment systems, according to the report. The statement goes on to say that digital currencies must be energy efficient and fully cross-border interoperable.

G7 leaders confirmed that they share responsibility for minimizing “harmful spillovers to the world monetary and financial system.”

The statement went on to say that CBDC issuing should be “based in long-standing public commitments to openness, rule of law, and sound economic governance.” Although no G7 country has issued a CBDC, numerous countries, like the United Kingdom, are actively investigating the technology and economic implications.

Story by : Norvisi Mawunyegah