According to Masato Kanda, Japan's senior currency diplomat, the Group of Seven (G7) advanced economies, which Japan is chairing, will address ways to assist poor nations implement central bank digital currencies (CBDCs) in accordance with international norms. The move comes as part of the G7's efforts to address challenges posed by digital technology.
Kanda said that the G7 will prioritize finding ways to assist developing nations with introducing CBDCs while ensuring transparency and good governance, including adhering to the G7 public policy principle for retail CBDCs. Although China has been leading the way in issuing a digital currency, G7 central banks have agreed on common standards for issuing CBDCs while some continue to experiment.
The rapid pace of digital innovation provides various benefits but also poses fresh challenges, such as cybersecurity, the spread of misinformation, social and political divides, and the risk of destabilizing financial markets. Policymakers must establish cross-border regulations for crypto assets, particularly in light of the collapse of crypto exchange FTX last year, which Kanda said was a serious wake-up call.
Additionally, the G7 will prioritize addressing debt vulnerabilities in some middle-income countries, Kanda said. Although he acknowledged it might be challenging to achieve concrete results for countries such as Zambia, Ghana, and Ethiopia, he hoped that there would be progress for Sri Lanka, with Japan, France, and G20 chair India initiating a plan to launch a creditor's committee on Thursday. Policymakers from around the world are gathering in Washington for the spring International Monetary Fund meetings this week.
The Group of Seven (G7) was formed in the 1970s to provide a forum for leaders to discuss and coordinate economic policies and other global issues of common concern.
