G7 says digital currency must meet strict standards

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G7 says digital currency must meet strict standards

Group of Seven advanced economies said on Wednesday that any digital currency issued by a central bank must meet strict standards and do no harm to the bank's capacity to fulfill its mandate on monetary and financial stability, and must also support and do no harm to the bank's ability to get rid of its negative influence.

If issued, a central bank digital currency CBDC would complement cash and could act as a safe settlement asset and anchor for the payments system, the G7 nations said after their meeting on Wednesday.

They said but the currencies must be issued in a way that do not infringe upon the central banks' mandates and meet rigorous standards of privacy, transparency and accountability for the protection of user data, they said.

Any digital currency CBDC should be grounded in long-standing public commitments to transparency, rule of law, and sound economic governance, G 7 finance leaders said in a statement.

While CBDCs could enhance internationally-transferable payments, the G 7 nations said they have a shared responsibility to minimize harmful spillovers to the cross-border system. Global central banks have stepped up efforts to develop their own digital currency to modernize financial systems and speed up domestic and international payments.

China has been leading the pack toward issuing a digital currency, while G7 central banks have been working to set common standards around issuing CBDCs as some experiment.