U.S. central bankers have continued to explore the possibility of developing a digital currency that would be directly available to businesses and households.

“We have assessed and we continue to carefully analyze the costs and benefits of pursuing such an initiative in the U.S.,” Fed Chairman Jerome Powell said this week.

In September, Representatives French Hill (R-Ark.) and Bill Foster (D-Ill.) said the central bank should consider a U.S.-backed cryptocurrency to remain competitive.

Visit Business Insider’s homepage for more stories.

U.S. central bankers have continued to explore the possibility of developing a digital currency that would be directly available to businesses and households, Federal Reserve Chairman Jerome Powell confirmed to lawmakers this week.

“While we are not currently developing a central bank digital currency, we have assessed and we continue to carefully analyze the costs and benefits of pursuing such an initiative in the U.S.,” Powell wrote in a letter to lawmakers dated Nov. 19.

A central bank-backed digital currency in the largest economy would be unprecedented and raise a host of legal and operational questions. Powell said it would be closely considered by policymakers but added that the U.S. could be in some ways better-positioned than other countries that have looked into such a proposal.

“We are carefully monitoring the activities of other central banks to identify potential benefits that may be relevant in the U.S. context,” he wrote. “Our observation is that many of the challenges they hope to address do not apply to the U.S.”

The letter was in response to questions raised by Representatives French Hill (R-Ark.) and Bill Foster (D-Ill.), who in September said the central bank should consider a U.S.-backed cryptocurrency to remain competitive.

“We are concerned that the primacy of the US dollar could be in long-term jeopardy from wide adoption of digital fiat currencies,” the lawmakers wrote in the initial letter to Powell. “It may become increasingly imperative that the Federal Reserve take up the project of developing a US dollar digital currency.”

Lees ook op Business Insider RIVM meldt hoogste aantal coronabesmettingen in een etmaal sinds begin van de pandemie

Digital currency proposals have emerged throughout the private sector over the past year – including at Facebook, JPMorgan and Wells Fargo – which some policymakers have flagged as potential risks to monetary policy and financial regulations.

“I think we agree that Libra raises a lot of serious concerns, and those would include around privacy, money laundering, consumer protection, financial stability,” Powell said in July of the digital coin rolled out by Facebook last year. “Those are going to need to be thoroughly and publicly assessed and evaluated before this proceeds.”