A group set up by the Federal Reserve to identify an alternative to Libor may make its selection next year, a sign of momentum behind efforts to move away from the borrowing gauge that became mired in an interest-rate-rigging scandal.

Potential alternatives for the London interbank offered rate have been narrowed to two by the Alternative Reference Rates Committee, a group comprising regulators and financial firms convened by the Fed in 2014.

"We'd like the committee to select a rate at some point next year," Daleep Singh, acting assistant secretary for financial markets at the U.S. Department of the Treasury, said in a Dec. 5 phone interview. "It is important to ensure enough time for a considered process with comprehensive feedback from end users, because they have to take up this new rate and create markets in it with sufficient liquidity. The goal is an orderly, market-driven transition."