One of the major hurdles for setting up a state-backed digital currency is creating a framework that all countries can agree on. The G7 finance ministers are taking this on as they begin to form a common set of rules that will govern the development, issuance and regulation of state-issued digital currency.
This week, the G7 finance chiefs are slated to release a joint statement that will outline their intentions for regulating state-issued digital currencies. The goal of the release is to prevent states from violating the privacy of their residents, as well as to combat money laundering and terrorism financing.
The G7 leaders will look to publish a set of common rules for state-issued cryptocurrencies this year, according to the FT October 3, 2017. The group of finance chiefs will aim to share common rules on regulating cryptocurrencies and the rules of engagement for other state-issued digital currencies more broadly, the FT reports.The G7 finance ministers and central bank governors met and agreed to develop common principles for government-backed digital currencies and release their findings later this year. According to them, these digital currencies can serve both as liquid and secure settlement assets and as anchors for payment systems.
G7 Establishment of common rules for central banks’ digital currencies
The G7 Finance Ministers meeting took place on 4 and 5 December. The meeting was the first face-to-face meeting of finance ministers since the G20 finance ministers’ meeting in Saudi Arabia in February. This meeting followed a virtual meeting on the 28th. The meeting was attended by G7 finance ministers and central bank governors. The G7 includes the United States, Britain, Japan, Germany, France, Italy and Canada. They discussed, among other things, central bank digital currencies (CBDCs), according to a statement released Saturday by G7 finance ministers and central bank governors. Innovations in digital money and payments can bring significant benefits, but also raise policy and regulatory issues, the Communication says. Financial policymakers noted that G7 central banks are exploring the opportunities, challenges and implications for the monetary and financial stability of central bank digital currencies: We are committed to working together as finance ministries and central banks, within our respective mandates, on the broader public policy implications. They clarified: We note that each CBDC, as a form of central bank money, can serve as a liquid and secure means of settlement and as an anchor for the payment system. Our goal is to ensure that CBDCs are built on the public sector’s longstanding commitment to transparency, rule of law and sound economic management, they continued. CBDCs should be sustainable and energy efficient; they should support innovation, competition and inclusion and be able to improve cross-border payments; they should operate within an appropriate data protection framework and minimise side effects, they added: We will develop the general principles and publish the results later this year. The heads of the International Monetary Fund (IMF), the World Bank Group, the Organisation for Economic Co-operation and Development (OECD), the Eurogroup and the Financial Stability Board (FSB) also participated in the G7 Finance Ministers’ meetings. What do you think about the G7 creating a common regulatory framework for central bank digital currencies? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.Over the past year, a number of countries have issued their own digital currencies. They have been touted as creating a new financial system and a way for countries to circumvent the dominance of the US dollar. But what happens when these states develop regulations that are not compatible with digital currencies? The G7 finance chiefs will meet this week to discuss the issue.. Read more about g7 digital currency and let us know what you think.
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