The Group of Seven (G7) advanced economies is set to discuss how to help developing countries introduce central bank digital currencies (CBDC) that are consistent with international standards. Japan’s top currency diplomat, Masato Kanda, has stated that this move is part of efforts to address the challenges that fast-moving digital technology poses to the global community. As part of these discussions, the G7 will prioritize assisting developing countries with the introduction of CBDC, taking into account factors such as transparency and governance. Meanwhile, G7 central banks have set common standards toward issuing CBDCs, as some countries proceed with experiments.
The rapid innovation of digital technology has provided various benefits but also presents fresh challenges, including cybersecurity, the spread of misinformation, social and political divides, and the risk of destabilizing financial markets. The collapse of crypto exchange FTX last year served as a “serious wake-up call” for policymakers to create regulation across borders. Kanda emphasizes that consensus among countries is that more regulation is needed, particularly after the FTX shock. However, he also notes that there are diverging views among countries regarding crypto assets.
In addition to discussing digital currencies and crypto regulation, the G7 talks will prioritize addressing the debt vulnerabilities of some middle-income countries. Kanda acknowledges that it may be challenging to see concrete results for countries such as Zambia, Ghana, and Ethiopia. However, he expresses optimism that there will be progress for Sri Lanka, as a creditor’s committee is set to launch on Thursday. The committee has been initiated by Japan, France, and G20 chair India.
In conclusion, the G7 talks, chaired by Japan this year, are focused on addressing the challenges posed by fast-moving digital technology, including cybersecurity, the spread of misinformation, social and political divides, and the risk of destabilizing financial markets. The G7 will prioritize helping developing countries introduce central bank digital currencies consistent with appropriate international standards. Additionally, the G7 will address debt vulnerabilities of some middle-income countries, with a plan to launch a creditor’s committee on Thursday initiated by Japan, France, and G20 chair India.
