The G7 highlighted that though the introduction of CBDCs offers ‘significant benefits’ they also said they raise “considerable public policy and regulatory issues".">
The G7 highlighted that though the introduction of CBDCs offers ‘significant benefits’ they also said they raise “considerable public policy and regulatory issues"." />
The G7 highlighted that though the introduction of CBDCs offers ‘significant benefits’ they also said they raise “considerable public policy and regulatory issues"."> G7 leaders: CBDCs must ‘support and do no harm’ - FStech Financial Sector Technology
The G7 highlighted that though the introduction of CBDCs offers ‘significant benefits’ they also said they raise “considerable public policy and regulatory issues".">

G7 leaders: CBDCs must ‘support and do no harm’

Representatives from the G7 economies have said that any central bank digital currency (CBDC) must "support and do no harm".

The G7 highlighted that though the introduction of CBDCs offers ‘significant benefits’ they also said they raise “considerable public policy and regulatory issues".

The statement came after an in-person meeting in Washington between the International Monetary Fund and the World Bank chaired by UK chancellor of the exchequer Rishi Sunak.

The officials said that CBDCs could offer a ‘liquid, safe settlement asset and an anchor for the payments system’ but highlighted the potential of these digital assets to facilitate illicit activity, destabilise the financial system or open the door to cybercrime.

The G7 offered 13 principles governing how best to approach these issues, whilst noting it is for national authorities to consider how best to balance them:

Principle 1. Monetary and financial stability

Principle 2. Legal and governance frameworks

Principle 3: Rigorous standards of privacy, accountability for the protection of users’ data, and transparency on how information will be secured and used is essential for any CBDC to command trust and confidence. The rule of law in each jurisdiction establishes and underpins such considerations.

Principle 4: To achieve trusted, durable, and adaptable digital payments; any CBDC ecosystem must be secure and resilient to cyber, fraud and other operational risks.

Principle 5: CBDCs should coexist with existing means of payment and should operate in an open, secure, resilient, transparent and competitive environment that promotes choice and diversity in payment options.

Principle 6: Any CBDC needs to carefully integrate the need for faster, more accessible, safer and cheaper payments with a commitment to mitigate their use in facilitating crime.

Principle 7: CBDCs should be designed to avoid risks of harm to the international monetary and financial system, including the monetary sovereignty and financial stability of other countries.

Principle 8: The energy usage of any CBDC infrastructure should be as efficient as possible to support the international community’s shared commitments to transition to a ‘net zero’ economy.

Principle 9. Digital economy and innovation

Principle 10: Authorities should consider the role of CBDCs in contributing to financial inclusion. CBDC should not impede, and where possible should enhance, access to payment services for those excluded from or underserved by the existing financial system, while also complementing the important role that will continue to be played by cash.

Principle 11: Any CBDC, where used to support payments between authorities and the public, should do so in a fast, inexpensive, transparent, inclusive and safe manner, both in normal times and in times of crisis.

Principle 12: Jurisdictions considering issuing CBDCs should explore how they might enhance cross-border payments, including through central banks and other organisations working openly and collaboratively to consider the international dimensions of CBDC design.

Principle 13: Any CBDC deployed for the provision of international development assistance should safeguard key public policies of the issuing and recipient countries, while providing sufficient transparency about the nature of the CBDC’s design features.

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