The G7 Finance Ministers and Central Bank Governors convened in Niigata, Japan, on May 13, 2023, ahead of the G7 Summit in Hiroshima City, to discuss digital currencies and their potential impact on the global monetary and financial system.
Representatives from esteemed organizations, including the International Monetary Fund (IMF), World Bank Group, Organization for Economic Cooperation and Development (OECD), and Financial Stability Board, attended the meeting.
During the discussions, the participants highlighted the potential of Central Bank Digital Currencies (CBDCs) in establishing a reliable, stable, and transparent global payment system. They lauded the valuable guidance provided by the CBDC guidebook developed by the IMF, which will be made available to the public in the forthcoming meetings of the IMF and World Bank Group later this year. Furthermore, the attendees reaffirmed their commitment to adopting new cryptocurrency regulations based on proposals that will be published by the Financial Stability Board in July 2023.
The G7 Finance Ministers also expressed their support for the implementation of the Financial Action Task Force’s Travel Rule, which mandates digital asset service providers to report cryptocurrency transactions. This updated Travel Rule is integrated into Europe’s new Markets in Crypto-Assets (MiCA) regulation under the Transfer of Funds rule. The MiCA regulation is expected to come into effect in October 2024 or early 2023 in three G7 countries.
In separate developments, the European Union and United States have commence initiatives to implement digital currencies and payment systems. The European Central Bank recently published its third progress report on the potential implementation of a digital Euro and argued that there is a strong case for issuing a digital Euro for its citizens. Furthermore, the United States plans to conduct tests on its FedNow quick settlement system in July, signaling the country’s commitment to exploring and developing efficient digital payment systems.
The G7 summit is slated to occur from May 19 to May 21, 2023, at the Grand Prince Hotel in Hiroshima City, Japan. This gathering of world leaders will provide a platform to address various global issues and foster collaboration on key matters of mutual concern.
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