The G7 states have gathered to asses the role of CBDCs and developed guidelines for implementation
Finance officials of the group of seven advanced economies gathered on Washington on October 13 to assess CBDC adoption, agreeing on 13 principles for implementation. This milestone seeks to enable international coordination and cooperation to prevent harm to global financial systems. CDBCs shall thereby act complementary to cash and act as a liquid and safe settlement asset and an anchor for the payments system.
When issuing a CBDC, the project operators must ensure compliance with mandates of the central banks and meet set standards of privacy, transparency and accountability for user data protection.
While the chance of CBDCs to enhance cross-border payments was acknowledged, the G7 states have stated there is a “shared responsibility to minimize harmful spillovers to the international monetary and financial system.”
Privacy in particular was an issue of concern for the Digital Yuan, the CBDC of China which has entered advanced stages of implementation. The G7 countries on the other hand, including Germany, France, Italy and the UK in Europe, the US and Canada in the Americas and Japan in Asia, have all been noticeably lagging in CBDC development. Central banks are now urging the governments to step up their game.
In fact, the Digital Yuan has left Western powers nervous as it is on its way to become a serious competition for the Dollar as a global reserve currency. In concordance with such ambitions, DeFi was banned across the entirety of mainland China, eliminating any digital currency competition. For underground users that is, as the use of the Digital Yuan will be mandatory anyway.
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