By Pete Schroeder

WASHINGTON (Reuters] – Although the Federal Reserve has published a paper on the possibility of adopting a central banking digital currency (CBDC), it will not advance Washington debate. However, Congress’ decision to take the issue up to Congress indicates that an official U.S. electronic dollar may still be years off.

On Thursday, the U.S. central banking released an eagerly awaited paper on the pros/cons of adopting the digital dollar. This is essentially a digital equivalent of cash in your pockets. The bank refused to make a statement and suggested that Congress decide.

CBDC supporters saw this report as an important milestone for developing some kind of digital dollar policy. But with lawmakers still confused, even within their own parties, analysts warned that it was not a good idea to hold your breath.

Isaac Boltansky (director of policy research at brokerage BTIG) wrote that the paper “…is light on conclusions” and reinforced his view that a Fed-backed CBDC was — at best — years away. “We remain skeptical that a legal solution will emerge.”

A CBDC, unlike cryptocurrencies that are managed by individuals, would be issued by the central bank and backed by it. The CBDC would allow consumers to claim direct to the central banks, in an analogous fashion to real cash.

According to the Fed, a digital currency could revolutionize the financial market by speeding payments worldwide and giving customers greater access, as well as accelerating global payments. However, it warned that poorly-designed digital dollars could lead to financial instability and weakening banks.

About 90 countries https://www.atlanticcouncil.org/cbdctracker, including China, are exploring or launching their own CBDCs, according to the Atlantic Council, sparking concern among some that the United States will cede the dominance of the global financial system if it does not digitize the dollar, currently the global reserve currency.

According to Michael Feroli, JPMorgan’s chief economist (NYSE:), the achievement of consensus over these thorny issues in an already divided political environment “seems impossible.”

Some Republicans desire the Fed’s embrace of innovative technology. However, some others are worried about its expansion and competition with other banks.

Republican U.S. Following the Fed report, Senator Cynthia Lummis tweeted, “I’m genuinely undecided whether there is a legitimate need for a CBDC,” Republican U.S.

Senator Banking Committee Chairman Sherrod brown, a Democratic Progressive, supports a digital currency that will boost financial inclusion. However other Democrats raised concerns about the possibility that it could be misused for illegal purposes.

Brown will play an important role in shaping legislation for the narrowly divided Senate.

Even if Congress could agree to and pass legislation, the rollout and implementation of a digital currency would take a long pilot phase.

“Even if you start today, we’re still going to be a couple of years away from this becoming a reality,” said Jonathan McCollum, chair of federal government relations for Davidoff Hutcher & Citron, who has lobbied lawmakers to get started.

The private sector will likely move forward with products that could weaken the case for a digital currency as lawmakers, regulators, and the White House discuss the matter, Ian Katz (managing director at Capital Alpha Partners) stated in a note.

“If it does happen years later, the Fed CBDC wouldn’t be as important as it was now,” he said.