Senator Kevin Cramer of North Dakota questioned Powell during the hearing on the Federal Reserve's investigation and testing of a possible CBDC and how, in theory, the central bank could allay consumer worries about privacy and government control.

Powell said that "nothing like that is is remotely close to happening anytime soon" and that "people don't need to worry." Powell further confirmed that the Federal Reserve is "nowhere near recommending, let alone adopting a CBDC in any form."

Powell informed Cramer that the user privacy issues with government-controlled accounts were "something we would not stand for, do, or propose here in the US."

"We're a long way from even considering it, but if we ever did something like this, we would use the banking system. All Americans, or any Americans for that matter, having individual accounts would be the last thing the Federal Reserve would desire. Accounts are only seen in banks. We're going to keep it that way.

"It's just really a question of following technology as it evolves and in a way that serves the public better," Powell said in closing remarks on the subject.

In contrast, Texas senator Ted Cruz's amendments to the Federal Reserve Act last month aim to completely ban the issuance of a CBDC among banks. Republican presidential candidate Donald Trump had previously threatened to block the issuance of a CBDC should his campaign succeed this year.