Powell stated that the US government would not support a service where the government could view and track people' transactions, adding that the Fed was not close to establishing a digital dollar because it has no interest in a system that would require user data.

"We're nowhere near recommending – or let alone adopting – a central bank digital currency in any form," Powell said, adding that "people don't need to worry about it."

Powell went on to say that the banking sector, not the Federal Reserve, will be involved in any eventual implementation of a digital currency. Powell said that in order to proceed with a US digital currency, the central bank will require authorization from the Congress and White House.

Although research on CBDC is still in its early stages, prominent Republicans, including Donald Trump, have voiced their opposition to the incorporation of a virtual currency. The digital currency would be used to track citizens, according to Senator Ted Cruz, who wrote a bill in February to prevent the Federal Reserve from endorsing CBDC.