Federal Reserve Vice Chair Lael Brainard issued a reality check on those awaiting a digital dollar, saying that creating a central bank digital currency (CBDC) in the U.S. would likely take as long as five years.

In Brainard’s first testimony after her recent swearing-in ceremony to take over the Fed board’s vice chair role, she told the House Financial Services Committee that the Fed is still studying the question and wouldn’t move before approval from the White House and Congress – which in itself could add a considerable period of debate before an authorizing law can be passed.

“It takes a long time,” Brainard said in a Thursday hearing, comparing such a project with the Fed’s still incomplete real-time payments system that has taken years to build. “It could take five years to put in place the requisite security features, the design features.”

As to those design features, Brainard said it’s “probably preferable not to have an interest-bearing digital currency," answering some bankers’concernsthat a digital dollar could take a massive and potentially fatal bite out of their deposit business. She also mentioned the Fed is considering caps on digital dollar holdings to encourage customers to use them only for payments and not as a safe asset for people or businesses to pile their money into.

If the Fed does launch a digital dollar, Brainard said the asset couldcoexistwith stablecoins and the existing financial system.

“I really see the potential for a digital dollar as being complementary to a more stable, efficient system that would includestablecoinsand commercial bank money, so I really see them potentially enabling private sector innovation,” she said. CBDC holdings and transactions would still be managed through private sector accounts, Brainard confirmed, and not at direct customer accounts at the Fed.

Brainard said letting other central banks issue digital analogues to cash – such as in Europe – could eventually degrade the U.S. dollar as the global reserve currency, leaving “potential risks to not having a CBDC” in the U.S.

Longtime Fed governor Brainard was recently sworn in as vice chair alongside a few other additions to the board, but the Fed is still absent its vice chair for supervision. Biden nominated former Treasury official Michael Barr, who also worked for a time as an adviser to centralized fintech companyRipple, to take that role, but he's stillawaitinga Senate confirmation vote.