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The G7 and public Digital Money (CBDC)

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"THE G7 is committed to working so that all citizens can have public and safe money."

The G7 meeting this weekend has ended with a very important support from the main countries of the world for the proposal to issue secure digital money (CBDC). The joint statement includes two points about CBDCs and so-called private “currencies” that express not only endorsement but also the firm commitment to work together in the project that the citizens of their countries can count on a public and safe money.

Point 17 it's a taking a resounding position in favor of the issuance of CBDCs:

"17. Innovation in digital money and payments has the potential to generate significant benefits, but also public policy and regulatory issues. The G7 central banks have been exploring the opportunities, challenges, as well as the implications for monetary and financial stability of central bank digital currencies (CBDCs) and we are committed to working together, as Ministries of Finance and Central Banks. , within our respective mandates, in their broader public policy implications. We note that any CBDC, as a central bank money form, could act as a safe and liquid asset and as an anchor to the payments system. Our objective is ensure CBDCs build on traditional public sector commitments to transparency, the rule of law, and sound economic governance. CBDCs must be resilient and energy efficient; support innovation, competition, inclusion and improvement of cross-border payments. And they must operate within adequate privacy and minimize collateral effects. We are going to work to achieve common principles and we will publish the conclusions at the end of this year ”.

Y point 18 is a clear message to those who might think about approving projects of other private currencies (“Stablecoins”) before multilaterally agreeing on their regulation:

"18. We reiterate that no global stablecoin project should begin operating until it adequately addresses legal, regulatory and supervisory requirements through proper design and adhering to common standards. We are committed to international cooperation to ensure common standards, and we support international standard-setting bodies in reviewing existing regulatory standards, and emphasizing the importance of addressing any identified gaps .. "

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About the Author

Miguel A. Fernández Ordóñez

Miguel A. Fernández Ordóñez

State economist. Former Governor of the Bank of Spain and member of the Governing Council of the European Central Bank (ECB). He currently teaches Seminars on Monetary Policy and Financial Regulation at IEUniversity.

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