CBDC principles according to G7

U.S. dollar banknote with map

Interesting document from the british government publishing group. The G7 met last year and discussed CBDC’s. It isn’t very practical or even interesting in itself, but the mere fact that the G7 are talking about it and publish their views, indicates they are seriously working on it, indicating it as ‘strategic’.

Well, there is gonna be a lot of demand for blockchain programmers if we get a CBDC.

In short : the main principles :

Principle 1: Monetary and financial stability

Any CBDC should be designed such that it supports the fulfillment of public policy objectives, does not impede the central bank’s ability to fulfill its mandate and ‘does no harm’ to monetary and financial stability.

Principle 2: Legal and governance frameworks

G7 values for the International Monetary and Financial System should guide the design and operation of any CBDC, namely observance of the rule of law, sound economic governance and appropriate transparency.

Principle 3 : Data privacy

Rigorous standards of privacy, accountability for the protection of users’ data, and transparency on how information will be secured and used is essential for any CBDC to command trust and confidence. The rule of law in each jurisdiction establishes and underpins such

Principle 4 : Operational Resilience and Cyber Security

To achieve trusted, durable, and adaptable digital payments; any CBDC ecosystem must be secure and resilient to cyber, fraud and other operational risks.

Principle 5: Competition

CBDCs should coexist with existing means of payment and should operate in an open, secure, resilient, transparent and competitive environment that promotes choice and diversity in payment options.

Principle 6: Illicit finance

Any CBDC needs to carefully integrate the need for faster, more accessible, safer and cheaper payments with a commitment to mitigate their use in facilitating crime.

Principle 7: Spillovers

CBDCs should be designed to avoid risks of harm to the international monetary and financial system, including the monetary sovereignty and financial stability of other countries.

Principle 8: Energy and Environment

The energy usage of any CBDC infrastructure should be as efficient as possible to support the international community’s shared commitments to transition to a ‘net zero’ economy.

Principle 9: Digital economy and innovation

CBDCs should support and be a catalyst for responsible innovation in the digital economy and ensure interoperability with existing and future payments solutions.

Principle 10: Financial inclusion

Authorities should consider the role of CBDCs in contributing to financial inclusion. CBDC should not impede, and where possible should enhance, access to payment services for those excluded from or underserved by the existing financial system, while also complementing
the important role that will continue to be played by cash

Principle 11: Payments to and from the public sector

Any CBDC, where used to support payments between authorities and the public, should do so in a fast, inexpensive, transparent, inclusive and safe manner, both in normal times and in times of crisis.

Principle 12: Cross-border functionality

Jurisdictions considering issuing CBDCs should explore how they might enhance cross-border payments, including through central banks and other organisations working openly and collaboratively to consider the international dimensions of CBDC design.

Principle 13: International development

Any CBDC deployed for the provision of international development assistance should safeguard key public policies of the issuing and recipient countries, while providing sufficient transparency about the nature of the CBDC’s design features.

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