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The United States (U.S.) has yet to reach a conclusion regarding the implementation of a central bank digital currency (CBDC), stated Federal Reserve Vice Chairman Michael Barr. He characterized the Federal Reserve's current stance as being in the "basic research" stage.

“Investigation and research are very different from decision making about next steps in terms of payments system development, and we are a long way from that,” Barr stated during a Friday event at the Federal Reserve Bank of Philadelphia. He went on to emphasize that the ongoing research primarily focuses on exploring the intricacies of the "system architecture" and various tokenization models.

And even if it had completed its research, Barr said it wouldn’t make any move without “clear support from the executive branch and authorizing legislation from Congress.” Such a bill would have to clear a divided Congress, and the idea of a digital dollar has already drawn sharp criticism from Republican lawmakers.

Barr emphasized the imperative for Congress to devise solutions regarding stablecoins, which are digital assets in the crypto sector backed by stable reserves like the U.S. dollar.

“I remain deeply concerned about stablecoin issuance without strong federal oversight,” he said. “If non-federally regulated stablecoins were to become a widespread means of payment and store of value, they could pose significant risks to financial stability, monetary policy, and the U.S. payments system. It is important to get the legislative and regulatory framework right before significant risks emerge.”

In the meantime, the Fed has introduced its FedNow real-time payments network. Certain advocates of FedNow have proposed that it might potentially rival the functionalities provided by stablecoins. Barr noted that the program has thus far experienced limited adoption.

“While current volumes on FedNow are small, I expect that participation will grow over time,” he said.