For the first time, the Federal Reserve has debated and publicly commented on the introduction of a central bank digital currency, as it seeks to keep pace with global financial innovation and maintain the supremacy of the dollar.

“We look forward to engaging with the public, elected representatives and a wide range of stakeholders as we examine the positives and negatives of central bank digital currencies [CBDC] In the U.S.,” Federal Reserve Chairman Jay Powell said in a statement.

The Fed has been hesitant to adopt a central bank digital currency in recent years, saying it will only do so if the benefits outweigh the costs. It lags behind Chinese authorities, which are piloting a digital yuan.The European Central Bank has also intrusion Enter technology.

Powell has said before Any CBDC should “serve as a complement to, not a substitute for, cash and current private sector digital forms of the U.S. dollar, such as deposits in commercial banks.”

After months of anticipation, the Federal Reserve released a lengthy discussion paper on Thursday that will serve as the basis for what is expected to be a heated and important debate at the heart of the central bank in the coming months — even though it made clear it did not “Supports any policy outcome” at this point.

“While a CBDC could provide households and businesses with a secure digital payment option as payment systems continue to evolve, and potentially lead to faster payment options between countries, there may also be downsides,” the Fed said.

“They include how to ensure that a CBDC maintains monetary and financial stability and complements existing payment methods. Other key policy considerations include how to protect citizens’ privacy and maintain the ability to fight illicit finance,” it added.

The Fed is seeking public comment on a potential CBDC over the next 120 days, but has yet to make any decisions on its structure or whether to launch it.

In the discussion paper, the central bank noted that inaction in developing a U.S. digital currency could erode the country’s dominance in global markets.

“It’s important . . . to consider the implications of a potential future state where CBDCs may have been introduced by many foreign countries and monetary unions,” the Fed said. “Some argue that if these new CBDCs are more attractive than the existing dollar form, the global use of the dollar could decrease — and a U.S. CBDC could help preserve the dollar’s ??international role,” it added.