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The Federal Reserve building stands in Washington on May 1, 2020.

Kevin Lamarque/Reuters

A group of seven major central banks including the U.S. Federal Reserve set out on Friday how a digital currency could look like to help catch up with China’s “trail blazing” and leapfrog private projects like Facebook Inc’s Libra stablecoin.

The central banks and the Bank for International Settlements (BIS), said core features should include resilience, availability at low or no cost, appropriate standards and clear legal framework, and an appropriate role for the private sector.

Bank of England (BoE) Deputy Governor and chair of a BIS committee on payments Jon Cunliffe said the rise in cashless payments since lockdowns to fight the pandemic has accelerated how technology is changing forms of money.

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Central banks began looking closely at digital currencies after Facebook last year announced its yet-to-be-launched digital token Libra that would be backed by a mixture of major currencies and government debt. The body behind Libra has since tweaked plans and now hopes to launch several “stablecoins” backed by individual currencies.

Central banks need to keep up to avoid the private sector plugging payments gaps in unsuitable ways, Cunliffe said.

Besides the Fed and the BoE, the seven central banks that have teamed up with the BIS include the European Central Bank, the Swiss National Bank, the Bank of Japan and the Bank of Canada, but not the People’s Bank of China.

China is already piloting a digital renminbi, with the PBOC saying it would boost the yuan’s reach in a world currently dominated by the dollar.

Japan’s top financial diplomat, Kenji Okamura, said on Thursday that China was seeking to win a first-mover advantage in building its own digital currency, warning it was “something we should be afraid of.”

“I don’t think this is a race between central banks,” Cunliffe said, adding that no one central bank digital currency (CBDC) answer was going to dominate the whole world.

Benoit Coeure, head of innovation at the BIS, said there was no international race, but there was an advantage for central banks to quickly catch up with the private sector and get ahead of the curve to shape the future.

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The International Monetary Fund could play an important role in dealing with any cross-border “spillovers” from a national CBDC, Coeure said.

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