Members of G20 countries are laying the framework for digital currencies by accepting the same instead of cash ahead of the upcoming Saudi Arabia summit, Kyodo News reported.
All the members, including the representatives from 19 countries and the European Union, will participate in a discussion for the same in October in Washington, discussing the problems of using digital currencies as a means of payment, including the risks of money laundering.
The Japanese news outlet detailed that the move was pushed by the Chinese development of digital yuan and Facebook’s proposal for its digital currency called Libra.
The debates on digital currencies are going for years in international forums. Last year, in the G20 Osaka summit, the member countries concluded that the rising digital currencies are not a threat to the traditional monetary system due to the market size compared to fiats. However, in October the body released a report mentioning the threats from the stablecoins.
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China is ahead in CBDC development
Major central banks and governments remained hostile towards digital currencies like Bitcoins for years and ignored the implementation of such a decentralized network on the traditional system.
But they were forced to think the other way when Facebook came up with a proposal of introducing its digital currency. The central banks were threatened by the size of the platform’s user base all of whom will be able to access Libra for transactions, thus creating a massive private monetary ecosystem.
Meanwhile, the People’s Bank of China (PBoC) remained ahead of its global peers by starting the development of a central bank digital currency (CBDC) in 2014. It has completed the development process and is now testing in real-world scenarios.
Central banks of countries like France and South Korea are also accelerating their works on CBDC and are trialing with the digital versions of fiat.