The European Commission and European Central Bank are working together to investigate the policy, legal and technical questions emerging from a possible introduction of a digital euro.
Having just closed a public consultation on the subject, the ECB says it will now consider whether to start a digital euro project towards the middle of the year as it looks to answer design and technical questions ahead of any decision to actually issue the CBDC.
Now, the ECB and the EC have created a joint technical group to look at the policy, legal and technical aspects of the possible introduction of a digital euro.
The EC says that one of the reasons a digital euro is appealing is that it could help promote global use of the currency.
However, the Commission has also stressed that there are significant issues to address relating to financial stability, financial inclusion, and anti-money laundering and counter-terrorism financing.
Among respondents to the ECB's public consultation, privacy of payments ranked highest among the requested features of a potential digital euro (41% of replies), followed by security (17%) and pan-European reach (10%).
Meanwhile, China, which is further ahead in its digital yuan efforts, is already looking ahead to a global payments network based on CBDCs.
The State-sanctioned Blockchain-based Service Network (BSN) has laid out plans to build a "digital currency payment network in five years based on the CBDCs of various countries and stablecoins, working with several international banks and technology companies."
Continues a blog: "This digital payment network will completely change the current payment and circulation method, enabling a standardised digital currency transfer method and payment procedure for any information system.
"Beta version of this convenient and cost-friendly global payment solution will be launched in the second half of 2021."