The G7, a group of seven industrialized nations, is expected to release guidelines for the creation of central bank digital currencies (CBDC), presently, no CBDC has been issued by any of the G7 countries.
According to reports, the proposed rules are made up of 13 sections, with the major focus on transparency and privacy. The draft guidelines could be approved at a conference of financial leaders scheduled for Wednesday in Washington.
The draft rules recognise the rise in popularity of cryptocurrencies in general, as well as the increase of digital payments in recent years.
In light of fears that China’s CBDC could be used as a surveillance tool, the document also emphasizes the importance of focusing on user privacy and security. Despite the fact that issuance is a country’s sovereign prerogative, the CBDC must, according to the draft rules,
“Set out a common set of principles, and underscoring the fundamental importance of shared values such as transparency, rule of law, and sound economic governance, these principles can guide and inform exploration of retail CBDC in the G-7 and beyond.”
With China’s advancement in the industry, the discussion over CBDCs has heated up. The world’s most populous country is years ahead of schedule when it comes to CBDC deployment, having finished not just the construction of the digital Yuan but also running statewide pilot projects to test its numerous use cases for nearly two years.
The bulk of countries throughout the world are working on their CBDC development on their own, but they are all years behind China.
As a result, the G7’s interest in CBDC could hasten growth while also assisting in the establishment of a common standard among diverse nations to aid in cross-border operations.
