Japanese news outlet Kyodo reports that the G7 meetings later this year will include discussions about central bank digital currency (CBDC) to share knowledge. It claims the Japanese government made the suggestion and the United States responded positively. The Bank of Japan formally set up a digital currency working group just last week.
The report claims the topic is in response to China’s lead in CBDC research with its digital yuan already starting trials. And it’s a potential challenge to the U.S. dollar’s dominance. Following the June 2019 announcement of Facebook’s Libra, the G7 rapidly set up a working group on stablecoins and published a report just four months later.
If one looks at G7 members, most are already involved in CBDC research at some level. The UK, Canada and Japan have spent several years researching, and each published multiple major reports on the topic. France has recently started tests and, together with fellow G7 member Germany, is involved in the Bank for International Settlements (BIS) Innovation Hub for Europe, which explores CBDC. More recently, the U.S. Federal Reserve has said it’s monitoring CBDC developments. The only G7 member not involved in CBDC research is Italy, although it recently expressed an interest.
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