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G7 FINANCE LEADERS GAVE GUIDELINES FOR CENTRAL BANK DIGITAL CURRENCIES

G7 FINANCE LEADERS GAVE GUIDELINES FOR CENTRAL BANK DIGITAL CURRENCIES

Context:

G7 financial leaders have set financial guidelines for central bank digital currencies.

About the Guidelines:

  • Any digital currency issued by a central bank must "support and not harm" the bank's ability to fulfil its mandate for financial stability, and must meet critical standards.
  • Funds must be disbursed in a manner that does not undermine the central banks’ mandates and meet strict standards of confidentiality, transparency and accountability for the protection of user information.
  • Any central bank digital currency (CBDC) must be based on social responsibility that creates transparency, good governance and good economic governance.

What is a CBDC?

  • Central Bank Digital Currency (CBDC), or the national digital currency, is simply the digital currency of the country's fiat currency.
  • Instead of printing paper money or coins, the central bank issues electronic tokens.
  • This token value is supported by the full faith and credit of the government.

About G7:

  • The Group of Seven (G7) is an intergovernmental political forum formed by Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
  • Its members are the world's largest developed IMF advanced economies and wealthiest liberal democracies.

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