(Ecofin Agency) – While several countries, including China and Nigeria, have been working for months on their projects to create a central bank digital currency, the G7 countries are finally taking a first step in this direction.
G7 finance ministers and central bank governors approved 13 public policy principles for central bank digital currencies (CBDCs) on Wednesday, October 13 in Washington. While this regulatory framework serves above all as a recommendation and does not automatically open the door to the creation of digital currencies by the richest countries in the world, it is an important step towards this goal.
« Innovation in digital currency and payments has the potential to bring huge benefits, but it also raises huge public policy and regulatory challenges. », Indicates the joint G7 statement.
According to the organization, CBDCs should therefore be based on transparency, the rule of law and sound economic governance. Rigorous privacy and cybersecurity standards will need to be put in place, while ensuring transparency about how information will be secured and used.
Currencies will need to be developed with respect to energy efficiency and operate in an open and competitive environment. Countries that make this choice will also have to ensure interoperability on a cross-border basis and minimize any negative impact on the international monetary and financial system.
“We reaffirm that any CBDC must be based on our long-standing public commitments to transparency, the rule of law and good economic governance. Any CBDC must support and not undermine the ability of central banks to fulfill their monetary and financial stability mandates ”, continues the G7.
As a reminder, no G7 country has yet launched a central bank digital currency, but various projects are under study, such as the Jura project, an experimental digital currency jointly developed by the Banque de France and the Swiss National Bank.
In China, on the other hand, the digital yuan, in testing for nearly a year, is the very first digital currency issued by a central bank. Nigeria was due to launch its eNaira in October, but this has been postponed.
Adoni Conrad Quenum (intern)
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