A meeting of the G7 committee has raised the potential role of Central Bank Digital Currencies in ensuring a stable and transparent global financial system.
The meeting in Niigata, Japan featured G7 nations the UK, US, Canada, France, Germany, Italy and Japan. It precedes the annual G7 summit, to take place in Hiroshima from May 19th-21st.
A communique following the meeting said the nations would continue to deliberate on digital money policy “to harness the benefits of innovation such as payment efficiency as well as financial inclusion while addressing potential risks to the stability, resilience and integrity of the monetary and financial system”.
It said: “A reliable, stable, and transparent global payment system is a key foundation for our economic and financial activities, and Central Bank Digital Currencies (CBDCs) could have a substantial role to play in this context.”
CBDCs are at odds with the Bitcoin ideal of decentralisation: issued by central banks, they are a digital form of a country’s fiat currency.
The G7 added: “Any CBDC should be grounded in, amongst others, transparency, the rule of law, sound economic governance, cyber security and data protection.”
It added that it welcomes the International Monetary Fund’s work on a ‘CBDC Handbook’ for nations to follow.
The communique also offered support for the ‘Travel Rule’, an existing financial regulation which was extended to crypto in 2019. This states that any crypto transaction that crosses a certain threshold – set by individual Financial Action Task Force member states – must be accompanied by the personal information of the customer.
“We support initiatives by the FATF on accelerating global implementation of the FATF Standards on virtual assets, including the ‘travel rule’, and its work on emerging risks, including from DeFi arrangements and peer-to-peer transactions,” it said.
Gary Gensler, chair of the United States Securities and Exchange Commission, has responded to a Coinbase petition demanding a clear stance on crypto regulation. He told the Financial Markets Conference: “To make it quite direct: this is a field that has been operating largely non-compliant. There’s nothing about a new technology that makes it non-consistent with the public policies that congress has [already] laid out.”
The United States Secret Service revealed in a Reddit ask-me-anything (AMA) session that it owns cryptocurrency, has an NFT collection and believes blockchain technology could be crucial in fighting financial crime.
Following a record-breaking 400,000 inscriptions in one day, Bitcoin Ordinals NFTs have now reached 6.8 million inscriptions and $35m in network fees.
The overall market cap of the 24,100 coins is at $1.13 trillion at the time of writing (7am UK), a 1.3% decrease in the last 24 hours, with Bitcoin trading around $27,100.
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