The role of digital currencies has been at the center of a lot of discussion at the World Economic Forum (WEF) in Davos this year. As a measure to address the fragmented regulatory system that surrounds digital currencies, the WEF has now announced the Global Consortium for Digital Currency Governance. The global consortium will focus on providing a framework capable of governing digital currencies, including stablecoins like Tether and USDC.
The aforementioned announcement comes days after the WEF released the “The Central Bank Digital Currency Policy-Maker Toolkit.” The toolkit provides guidelines to policymakers in countries that are planning to develop and launch their own digital currencies.
While the announcement claimed that digital currencies are an ideal tool for financial inclusion, it also highlighted the need for good governance. According to the WEF’s announcement, the consortium will be the first initiative to focus on a multi-stakeholder approach, while bringing together – “leading companies, financial institutions, government representatives, technical experts, academics, international organizations, NGOs and members of the Forum’s communities on a global level.”
According to Klaus Schwab, Founder and Executive Chairman of the World Economic Forum,
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“Building on our long history of public-private cooperation, we hope that hosting this consortium will catalyze the conversations necessary to inform a robust framework of governance for global digital currencies.”
The announcement and the timing of it are critical as countries like China have already taken steps towards issuing a digital Yuan. In fact, just recently, Japan also signaled that it intends to take note of economic opportunities. i.e. digital currency. The focus on digital currencies at Davos this year also highlights the global community’s efforts towards streamlining the regulatory framework for digital assets.