CHIARA OLDANI Chiara Oldani is a professor of monetary economics at the University of Viterbo ‘La Tuscia’ and the director of the Rome office of the G20 and G7 Research Groups. Her research focuses on financial innovation and stability. @ChiaraOldani
foreign reserves are denominated will definitely change the landscape of the monetary system. Among these countries, China is the pioneer. It launched its project for the e-yuan in 2019, and is willing to introduce the CBDC soon. However, the privacy of e-yuan trading is not a priority for the People’s Bank of China. The European Central Bank is in the technical phase of its digital euro project. It is willing to let Europeans have access to it in the safest possible way by 2026. Other G20 members are more conservative and are still at the pilot stage. At their Rio Summit, G20 leaders should agree on the principles on which digital financial intermediaries and trades can be smoothly regulated and supervised. Following the positive growth rates of digital markets and the preventive and constructive approach of G20 members, a market-based approach, as opposed to a strict regulatory one, is more likely to prevail among members. Another relevant issue for digital governance is the need for data standardisation in the digital financial system, overcoming the fragmentation of blockchain and of decentralised finance. This would contribute to enhancing the market’s transparency and accuracy, and to reducing market manipulation and insider trading.
intermediation of the domestic banking system. CBDCs are not cryptocurrencies and are aimed at enhancing financial inclusion, reducing costs and limiting money laundering and other illicit uses of digital money. Risks related to CBDCs mainly come from the lack of proper regulation for consumer protection, data privacy and anti-money laundering, and from the disintermediation of the banking system in developed countries. Of the 20 central banks in the G20, 19 are involved in CBDCs. Smaller countries such as Nigeria, Jamaica and the Bahamas have also introduced CBDCs, but the percentage of transactions that are paid with CBDCs in these countries is very low – indeed below 1%. The creation of digital currencies by those countries in whose currency most
central banks in the G20 are involved in central bank digital currencies 19 out of 20
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globalgovernanceproject.org
2024 — G20 BRAZIL: THE RIO SUMMIT
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