G30 Report On Digital Money Green Lights CBDCs, Yellow Lights Stablecoins, and Red Lights Crypto
In a new report, the Group of Thirty ("G30") an international body of financiers and academics, analyzed the potential benefits and the risks associated with new digitized forms of money—including cryptocurrencies, stablecoins, and central bank digital currencies ("CBCDs").
The G30 considered these new digitized forms of money in the context of the "solid foundation of the two-tier structure of money," in which the central bank and commercial banks both issue money. They said, "the former anchors the system, the latter extend credit to the private sector." They explained that "central bank money and commercial bank money are interchangeable at par," and that the “singleness” of money, "achieved through regulation, supervision, and the financial safety net, promotes trust and confidence." They called the two-tier structure "the strength of today’s monetary system."
On Unbacked Cryptoassets, the G30 concluded that Bitcoin and other unbacked cryptocurrencies are unsuitable as money. The association noted that their extreme price volatility, scalability constraints, and high energy consumption make them poor stores of value and inefficient media of exchange. G30 observed that such assets function, primarily, as speculative instruments rather than stable forms of money.
On Stablecoins, the G30 acknowledged their potential to enable faster, cheaper, and programmable payments, but emphasized their risks. The G30 cautioned that, much like the private banknotes of the free banking era, stablecoins are inherently fragile and vulnerable to runs if holders lose confidence in the issuer’s ability to redeem at par. The G30 warned that a proliferation of stablecoins could undermine the "singleness" of money, reintroducing conditions where different forms of the dollar might trade at varying prices. Additionally, the G30 cautioned that stablecoins could become vehicles for illicit finance and tax evasion, posing threats to AML and compliance frameworks. The G30 noted that the U.S. GENIUS Act—a proposed legislative framework for stablecoins—contains significant gaps in addressing these issues.
On CBDCs and Tokenized Deposits, the G30 found that these instruments showed promising innovations within the existing two-tier monetary system. The G30 emphasized that wholesale CBDCs, in particular, could modernize core financial infrastructure and ensure that large-value payments continue to be settled in safe central bank money. G30 further highlighted that tokenized deposits can deliver efficiency and programmability benefits while remaining within the prudentially regulated banking framework.
The G30 outlined three policy recommendations: (i) to accelerate work on CBDCs by advancing wholesale CBDC initiatives aimed at modernizing core payment infrastructure and preserving access to risk-free central bank money; (ii) to encourage regulated innovation by supporting private-sector developments—particularly tokenized deposits—within the prudentially supervised banking perimeter to enhance efficiency without compromising financial stability; and (iii) to establish robust stablecoin regulation through a strong, harmonized framework grounded in the principle of "same activity, same risk, ... same regulatory outcome," incorporating capital and liquidity standards, transparent reserve requirements, and comprehensive AML/CFT compliance measures.