G7 finance ministers and central bank governors met and agreed to work on common principles for state-backed digital currencies and publish their findings this year. They said these digital currencies “could act both as a liquid and secure settlement asset and as an anchor for the payment system.”

G7 establishes common rules for central bank digital currencies

G7 finance ministers met in London on June 4 and 5, the first face-to-face meeting of finance chiefs since G20 finance leaders met in Saudi Arabia in February last year. The meeting follows on from a virtual May 28 meeting attended by G7 finance ministers and central bank governors. The G7 includes the United States, United Kingdom, Japan, Germany, France, Italy and Canada.

Among the topics discussed were central bank digital currencies (CBDCs), according to a statement from G7 finance ministers and central bank governors released on Saturday.

“Innovation in digital money and payments has the potential to bring significant benefits, but also to raise public policy and regulatory issues,” the statement said.

Noting that G7 central banks “have explored the opportunities, challenges, as well as the monetary and financial stability implications of central bank digital currencies,” the financial leaders said, “we are committed to working together, as ministries of finance and central banks, within our respective mandates, on their broader public policy implications. They developed:

We note that any CBDC, as a form of central bank money, could serve as both a liquid and secure settlement asset and an anchor for the payment system.

“Our goal is to ensure that CBDCs are built on long-standing public sector commitments to transparency, the rule of law and sound economic governance,” they continued.

“CBDCs need to be resilient and energy efficient; support innovation, competition, inclusion and could improve cross-border payments; they should operate within appropriate privacy frameworks and minimize spillovers, ”they added, noting:

We will work on common principles and publish conclusions later in the year.

The leaders of the International Monetary Fund (IMF), the World Bank Group, the Organization for Economic Co-operation and Development (OECD), the Eurogroup and the Financial Stability Board (FSB) also participated in the meetings of the G7 chief financial officers.

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