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Key Takeaways
- The U.S. Senate passed the 21st Century ROAD to Housing Act 85-5, with a rider barring the Federal Reserve from issuing a CBDC or substantially similar digital asset through the end of 2030.
- President Trump signed an executive order in January 2025 opposing a digital dollar; Federal Reserve Chair Kevin Warsh also called a U.S. CBDC a “bad policy choice” during his nomination hearing.
- The Federal Reserve had not been actively pursuing a CBDC prior to the Senate vote, making the provision a preemptive legislative prohibition.
The U.S. Senate passed a bipartisan housing affordability bill Monday night that includes a provision barring the Federal Reserve from issuing a central bank digital currency. The 21st Century ROAD to Housing Act cleared the Senate in an 85-5 vote and is expected to move quickly through the House before heading to President Donald Trump for his signature.
CBDC Prohibition Language Inserted Into Unrelated Housing Legislation
Republican lawmakers insisted the CBDC ban be included in the housing bill. The legislation states that:
“The Board of Governors of the Federal Reserve System or a Federal reserve bank may not issue or create a central bank digital currency or any digital asset that is substantially similar to a central bank digital currency directly or indirectly through a financial institution or other intermediary.”
The prohibition would last four years, through the end of 2030. House lawmakers were considering an accelerated process to approve the bill as soon as Tuesday.
Trump Administration Has Opposed a Digital Dollar Since January 2025
President Trump signed an executive order in January 2025 prohibiting his administration from taking any steps toward a CBDC, stating the move would “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States.” Republican politicians have opposed a U.S. CBDC on grounds of government surveillance and financial privacy, pointing to European and Chinese state-issued digital currency efforts in making their case.
Federal Reserve Chair Kevin Warsh stated during his nomination hearing that he fully opposed a U.S. CBDC, calling it a “bad policy choice.” Former Fed Chair Jerome Powell had said in past remarks that even if the Fed were to consider a CBDC, it would have left operation and management to banks.
Fed Was Not Pursuing a Digital Dollar Prior to the Ban
The Federal Reserve had not been actively working on a CBDC prior to the Senate vote. The Federal Reserve had not been developing a CBDC, and neither the White House nor Congress had advanced formal proposals to create one. A CBDC, as defined in the legislation, refers to a digital asset issued and managed by a central bank.
While the U.S. Senate moved to formally prohibit a digital dollar, other major economies have continued development of state-issued digital currencies. The European Central Bank has been working on a digital euro, which is set to enter a pilot program in 2027 before a full launch in 2029. China has also pursued a digital yuan issued by the People’s Bank of China.
