The U.S. is going slow on central bank digital currencies (CDBCs) considering the risks they may pose to the dollar’s dominance, the chairman of the U.S. Federal Reserve said Thursday.

Speaking at an online event hosted by Princeton University in New Jersey, Jerome Powell said, “We don’t feel an urge or need to be first” on CDBCs. “Effectively,” Powell continued, “we already have a first-mover advantage because [the U.S. dollar is] the reserve currency.”

Powell estimated it will take “years rather than months” before the Fed releases a CBDC, despite early studies of digital dollar–friendly blockchains at the central bank’s Boston outpost.

He added the Fed is “investing heavily” in understanding the technology and looking at the policy questions CBDCs pose. 

Powell also admitted it was the private sector’s ability to create private money (in other words, bitcoin and other cryptocurrencies) that caused the Fed to look into CBDCs.

“We know that in the past when private-sector money [is created], the public sometimes just thinks of it as money,” Powell said. “At some point, they find out that it’s not money and that’s a really bad thing we need to avoid.”

There’s also a need for the Fed to be focused on “better regulatory answers” for global stablecoins, Powell said. At the end of last year, U.S. President Trump’s Working Group on Financial Markets released a report that said stablecoins should meet the same regulatory standards as other aspects of the financial system.

“They could become systemically important overnight,” Powell said. “We don’t begin to have our arms around the potential risks and how to manage those risks. The public will expect that we do and has every right to expect that. So that’s something that we’ve been working on with our colleagues around the world.”