The G7 discussions will focus on aiding developing countries with central bank digital currency (CBDC) adoption, regulating crypto assets, addressing debt vulnerabilities of middle-income countries, and mitigating challenges posed by digital innovation, such as cyber-security, misinformation, and financial market destabilization.
The Group of Seven (G7) advanced economies, chaired by Japan this year, will focus on addressing challenges posed by fast-moving digital technology, including central bank digital currencies (CBDCs), during its discussions. Japan's top currency diplomat, Masato Kanda, announced that a key theme will be to assist developing countries in introducing CBDCs while adhering to appropriate international standards. Kanda emphasized the need for transparency and sound governance to mitigate risks associated with CBDC development. China has been leading the way in digital currency adoption, but G7 central banks are setting common standards for CBDC issuance as some proceed with experiments.
Kanda acknowledged the benefits of digital innovation but highlighted the fresh challenges of cyber-security, 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 regulate across borders, he said. The international community agrees that more regulation is necessary for crypto assets, especially after the FTX incident, although there are some diverging views among countries.
Another priority for the G7 talks this year is to address the debt vulnerabilities of middle-income countries such as Zambia, Ghana, and Ethiopia. Kanda stated that it might be challenging to see concrete results for these countries. However, there are hopes for progress for Sri Lanka, with the launch of a creditor's committee on Thursday, initiated by Japan, France, and G20 chair India.
In summary, the G7 discussions will concentrate on assisting developing countries with CBDC adoption while ensuring transparency and sound governance. Regulating crypto assets, addressing debt vulnerabilities of middle-income countries, and mitigating challenges posed by digital innovation will also be high on the agenda.
The Group of Seven (G7) includes advanced economies Canada, France, Germany, Italy, Japan, the UK, and the US. Economic cooperation and global issues were the group's goals in 1975. The G7 nations have tremendous political and economic power and account for 40% of global GDP. The G7 meets with EU and invited guest nations to address global concerns and coordinate policy solutions. International commerce, climate change, and global health are common G7 themes.
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