US Senate Passes Temporary Ban on Central Bank Digital Currency
The U.S. Senate has passed a temporary ban on central bank digital currencies (CBDCs) as part of a bipartisan housing affordability bill. The 21st Century ROAD to Housing Act, which passed with an 85-5 vote on Monday night, includes a four-year prohibition preventing the Federal Reserve or any federal reserve bank from issuing or creating a CBDC or any substantially similar digital asset. While the Fed had no active CBDC project, Republican lawmakers pushed for the ban, citing concerns over government surveillance and financial stability. The bill is expected to quickly pass the House of Representatives and be signed into law by President Donald Trump, who previously issued an executive order in January 2025 opposing CBDCs. The ban would last until the end of 2030. This move contrasts with efforts in other jurisdictions, such as the European Central Bank's digital euro pilot program and China's digital yuan. Former Fed Chair Jerome Powell had indicated that any U.S. CBDC would be operated through banks, while current Fed Chair Kevin Warsh expressed strong opposition.
Key facts
- Senate passed housing bill with a 4-year CBDC ban.
- Ban prohibits Federal Reserve from issuing digital dollar.
- Republican opposition framed CBDC as surveillance overreach.
- Trump signed executive order against CBDC in Jan 2025.
- Ban lasts until end of 2030; House expected to pass.