“We have to address the risks arising from the development of central bank digital currencies (CBDCs) by ensuring factors such as adequate transparency and strong governance,” Kanda, Deputy Finance Minister for International Affairs, said at a seminar held in washington.
“As a priority this year, the G7 will explore how best to help developing countries introduce CBDCs consistent with appropriate standards, including the G7 public policy principle for retail CBDCs,” he said.
Outside of the G7, China has led the way in issuing a digital currency. The G7 central banks have set common standards for the issuance of CBDCs, while some are conducting experiments.
Kanda said that the rapid innovation of digital technology offers various advantages, but also new challenges such as cybersecurity, the spread of misinformation, social and political divisions, and the risk of destabilizing financial markets.
The crash of the FTX cryptocurrency exchange last year “was a serious wake-up call” for policymakers to create cross-border regulation, he said.
