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The Federal Reserve is still in the early stages of investigating the viability of a digital dollar.

During Thursday’s House Financial Services Committee hearing, Randal Quarles, Vice Chair for Supervision at the Fed, said the central bank’s stance on a digital currency is still in the formative stages.

Rep. French Hill (R-AK) questioned Quarles on central bank digital currency (CBDC) during his time, asking how the Fed’s attitude has changed in recent months. French, among other lawmakers, first took an interest in a U.S. CBDC in 2019 when he sent a letter to Fed chair Jerome Powell on the subject. At the time, Hill said Powell’s response indicated the Fed wasn’t actively exploring a CBDC. 

Quarles said the Fed has long been interested in the possibilities of a CBDC, but this year’s rise in government-backed payment systems across the world has driven the central bank to take a closer look at a possible U.S. payment system.

“I still think it would be premature to say that we believe that this is a solution that the United States would need to implement. We’re weighing pros and cons, there are pilot projects in place. This is still in the early stages. I wouldn’t say we’ve changed our stance and believe that this is something the U.S. needs,” he said.

The Fed has been conducting research on CBDCs, looking at theory behind a digital dollar. The central bank released a report earlier this week on possible implications culled from other research.

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