The Federal Reserve will be engaging with the public on the question of a digital dollar, according to Chair Jerome Powell.
Powell made his comments during Wednesday's House Financial Services Committee hearing in response to questions on the digital dollar concept from Representative Patrick McHenry (R-NC).
"This is going to be an important year," he said. "This is going to be the year in which we engage with the public pretty actively."
This engagement will come in the form of public events, according to Powell. He did not elaborate further but said the central bank is working on the rollout of these events.
Still, the Fed isn't planning on presenting a formal plan to the public. Policy and technical questions surrounding a central bank digital currency (CBDC) remain, according to Powell. The Fed will be looking to the public for feedback on problems it's identified, rather than comments on a solidified idea.
In the meantime, he said the central bank is working on solutions to the technical challenges it's identified related to a digital dollar. It's also in talks with other central banks that are exploring or issuing CBDCs.
Ultimately, the development of a digital dollar could require legislative authorization down the line, according to Powell. However, the Fed doesn't know when or how that will happen because as Powell said, "that isn't clear until we see which way we're going." This means Congress may hear more from the central bank as it fleshes out its plan.
"We will be engaging significantly with you and your colleagues on Capitol Hill," Powell said.
During Tuesday's Senate hearing, Senators Cynthia Lummis (R-WY) and Bill Hagerty (R-TN) also pressed the chairman on the Fed's CBDC progress. During that testimony, he called the digital dollar a "high priority project."
Powell has previously said the Fed is increasing its work on a digital dollar and other digital asset-related interests. Last year he acknowledged that a CBDC could help the payment system in the U.S.