State-Backed Assets Take the Spotlight Again

The next G7 meeting will kick off on February 12 and it would include a dedicated session on CBDCs, Reuters reports. Quoting Japanese Finance Minister Taro Aso, the news source explained that the G7 meeting would feature the world’s top economies discussing ways to bounce back from the coronavirus’ effects. One such proposal could involve CBDCs.

The meeting, which will be chaired by the British delegation, will start with a session focused on CBDCs. As Minister Tao added, other sessions will look into participating countries’ debt problems and digital taxation.

The G7 is a consortium of finance experts representing seven countries – the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom. Interestingly, several of these countries, notably Japan and France, have made major progress with CBDC rollout on their own. The most notable holdout on the CBDC issue has so far been the United States, with the country still remaining in the dark on how to execute it.

CBDCs have been a significant point of focus for countries over the past year. Governments hope to capitalize on blockchain’s benefits to improve financial inclusion, and with the coronavirus forcing countries to focus more on digital payments, the stars seem to have aligned for many to move to state-backed digital assets.

Along with CBDCs, growing developments in the crypto space have also drawn considerable attention from governments globally. Last October, former U.S. Treasury Secretary Steve Mnuchin chaired a meeting of G7 finance ministers and Central Bank Governors, where they discussed wide-ranging crypto regulations at length.

According to a statement from the Treasury Department at the time, several policymakers particularly from the G7 countries advocated for speedy digital asset regulations. Following the meeting, German Finance Minister Olaf Scholz ramped up his criticism for Diem, the stablecoin initiative announced by Libra Association back in 2019. Diem, which was known at the time as Libra, had ramped up attention due to the makeup of the founders behind the Libra Association.

Scholz had been a primary critic of the asset since it was announced. He continued with his criticism, calling the asset a “wolf in sheep’s clothing” and casting doubt on its extensive rebrand. The G7 explained that it will not accept the stablecoin until it enacts proper crypto laws. Per a separate Reuters report, a joint statement read,

“The G7 continues to maintain that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory, and oversight requirements through appropriate design and by adhering to applicable standards.”

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