Jerome Powell, chairman of the U.S. Federal Reserve, says that the institution is looking into the possibility of developing a central bank digital currency.

According to a letter published Nov. 19, Powell said that the Fed is aware of the efforts of other countries, such as China, to develop central bank digital currencies. Powell said the Fed continues to “carefully analyze the costs and benefits of pursuing such an initiative in the U.S.”

Powell’s remarks were made in response to questioning from lawmakers over the potential of a Fed-backed digital currency posed by Rep. French Hill and Rep. Bill Foster. The two representatives expressed concern for the dollar in the event that other countries begin to implement digital currencies.

In September, Republican Senator Mike Rounds also voiced concern for the U.S. falling behind in innovation, after lawmakers grilled Facebook for developing the digital currency libra.

Sen. Rounds said in an open letter,

I write regarding concerns recently expressed by a number of my colleagues about involvement in the Libra Association…It is profoundly disappointing that my colleagues chose to address your peers in such an ominous tone, which I fear may put a chill on innovation in the long run.

Powell told lawmakers that the U.S. central bank is still weighing whether a fully digital dollar would be beneficial in the U.S., and reiterated that the Fed is not currently developing a digital currency.

The Fed chairman said the demand for cash in the U.S. remains “robust,” even while citizens in other countries abandon the use of traditional fiat.

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