G7 leaders provide framework for issuing central bank digital currency

Financial leaders of the G7 met on Wednesday and discussed about central bank digital currencies, analyzing the framework and guidelines that needed to be put in place.

The G7 financial leaders support the idea of issuing a digital currency by a central bank but stressed that it must “support and do no harm” to the bank’s ability to fulfill its mandate on monetary and financial stability, and must also meet rigorous standards.

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Central bank digital currency could also enhance cross-border payments, but the G7 financial leaders said they have a “shared responsibility to minimize harmful spillovers to the international monetary and financial system.”

The G7 is made up of seven advanced economies, which includes the United States of America, Canada, France, Germany, Italy, Japan and the United Kingdom. In a joint statement the G7 finance ministers said:

“Any central bank digital currency (CBDC) should be grounded in long-standing public commitments to transparency, rule of law and sound economic governance,”.

Although no G7 nation is yet to issue a central bank digital currency, some of these nations are actively exploring and researching the idea. The United Kingdom’s central bank has been conducting its own research on CBDC with assistance from banking and fintech experts working in Google, PayPal, ConsenSys and Amazon.

On the global stage many nations have been stepping up efforts to issue their own digital currency. China is already miles ahead in regards issuing a CBDC. Last month Nigeria unveiled plans to launch its digital Naira (eNaira) on 1st Oct. which was later shifted to a future date to be announced.