Economy

G7 releases principles for central bank digital currencies

G7 financial officials underline that Central Bank Digital Currencies are not crypto assets

Gokhan Ergocun   | 14.10.2021
G7 releases principles for central bank digital currencies

ISTANBUL

The G7 finance officials on Thursday released principles for Central Bank Digital Currencies (CBDCs), stressing that "CBDCs must not compromise financial and monetary stability; should coexist with, and complement existing forms of money, and promote innovation and efficiency in payments."

Recalling that the upward trend in using digital currencies accelerated in the pandemic period, the G7 countries' joint report, named Public Policy Principles for Retail CBDCs, said a retail CBDC should be a digital form of central bank money.

The statement underlined that CBDCs are not crypto assets, which are highly volatile and not issued by central banks.

It also said the CBDC could be an important instrument for central banks in the future and it should be designed for meeting future payment needs.

"The international use of CBDC, including for cross-border payments, could bring important benefits, but if CBDC design is not carefully calibrated, might also pose unintended consequences," it highlighted.

The G7 principles were divided into two categories. The first category includes foundational issues, legal and governance frameworks, data privacy, competition, operational resilience and cybersecurity, illicit finance, spillovers, and energy and environment.

The second category comprises opportunities, financial inclusion, payments to and from the public sector, cross-border functionality, and international development.

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