The G7, Group of Seven (G7) advanced economies, will be looking into creating standards and regulations for digital currencies, specifically Central Bank Digital Currencies (CBDC). This is part of the efforts to address the globally advancing digital technology and its new challenges. Japan's top currency diplomat Masato Kanda stated how the proper transparency and governance should be ensured to provide these digital currencies with best possible risks. China has been a leader in this field and the G7 central banks have set the necessary standards.

There were several new obstacles that came with the fast-paced introduction of digital technology, with cyber-security, the spread of misinformation, social and political divides and risk of destabilising financial markets being among them. Last year's collapse of crypto exchange FTX was one of the wake-up calls for nations to create regulations, and it is a consensus between countries that more regulation is needed.

Furthermore, debt vulnerabilities of some middle-income countries will be one of the focal points of this year's G7 talks. It is expected that concrete results, for countries like Zambia, Ghana and Ethiopia, will be hard to come but Sri Lanka, with the initiative of Japan, France and G20 chair India, may have progress since the plan to launch a creditor's committee will be executed on Thursday.

The G7 is taking a very important step towards the developing digital currencies, by working on setting the proper standards, regulations and considering how best to help under-developed countries to bring them on board. This is a major step towards a global economic shift into the digital currency space, and with the right protocols and standards in place, it will help protect the financial space as well.



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