Following a meeting this week being held in Petersberg, Germany, G7 Finance Ministers and Central Bank Governors have issued a statement on the outcome of the meeting. While a good portion of the statement revolves around the war in Ukraine and the need for Macroeconomic stability, the group does touch upon central bank digital currencies or CBDCs. All of the countries that make up the G7 are reviewing the possibility of a digitally issued currency. The group acknowledges the potential for CBDCs to streamline transfers and payments globally.
To quote the statement:
“Digital innovation in payments is a key driver of economic progress and development, notably through faster, cheaper, more transparent and more inclusive cross-border payment services. We emphasise the important work being conducted through the G20 Roadmap for enhancing cross-border payments. In this context, we highlight the opportunities and implications of Central Bank Digital Currencies (CBDCs) and their potential role in future payment transactions. We recall the Public Policy Principles for Retail CBDCs agreed in October 2021 and reiterate that any CBDC should be grounded in transparency, the rule of law, sound economic governance, cyber security and data protection. We encourage jurisdictions exploring CBDCs to examine the international dimensions of CBDCs, in particular their cross-border use. CBDCs with cross-border functionality may have the potential to spur innovation and open up new ways to meet users’ demand for more efficient international payments, but continued international cooperation will be important to understanding and minimising any negative spillovers to the international monetary and financial system.”
In the US, the Federal Reserve is working with MIT on the project but has not indicated any preference for supporting or not supporting a digital dollar. As well, some policymakers are against a government-issued digital currency largely due to privacy concerns and others believe a bifurcated offering is better where central banks utilized a digital currency but consumers benefit from privately issued stablecoins.