A federal move to block a government-backed digital dollar is nearing enactment, tethered to a broader legislative package focused on housing.
Restrictions on the Federal Reserve
Late Monday, the U.S. Senate passed the 21st Century ROAD to Housing Act with a vote of 85-5. The bipartisan bill is designed to increase housing inventory and curb the practice of institutional investors purchasing large quantities of single-family homes. Buried within the legislation is a clause that prohibits the Federal Reserve from creating or issuing a central bank digital currency (CBDC) through the end of 2030.
The mandate specifies that the Fed is restricted from issuing any digital currency or similar digital asset, whether directly or through any financial intermediary. Even after the 2030 expiration of this ban, the central bank would be required to obtain explicit authorization from Congress before pursuing any digital dollar initiative.
Private Stablecoins Remain Untouched
The legislation explicitly excludes private stablecoins from this ban. Any dollar-denominated currency that is defined as open, permissionless, and private remains unaffected. This ensures that issuers such as Circle and Tether, which are currently regulated under last year’s GENIUS Act, will continue their operations without interference from this specific provision.
Political Context and Current Stance
There is currently no active federal project to develop a CBDC. The Federal Reserve has not progressed beyond the research phase. Both Fed Chair Kevin Warsh and President Donald Trump have vocalized opposition to a digital dollar, with critics labeling it a potential tool for financial surveillance. In January 2025, Donald Trump signed an executive order directing his administration to halt any development of such a currency.
The bill was authored by Banking Committee Chair Tim Scott alongside Ranking Member Elizabeth Warren. During the floor proceedings, Tim Scott highlighted the urgent need to address high housing costs and low supply. Elizabeth Warren characterized the bill as the most significant housing legislation in three decades, while Senate Minority Leader Chuck Schumer described the bipartisan success as a model for governance. The floor debates focused heavily on housing supply and the role of corporate landlords rather than the included digital currency ban.
The Road Ahead
The CBDC ban was included as a political incentive to secure support from House Republicans. The Senate first incorporated this language in March. While some conservative members of the House, such as Rep. Anna Paulina Luna, have argued that the freeze on CBDCs should be permanent, the House leadership is expected to process the bill quickly. Meanwhile, the U.S. approach contrasts with global developments; the European Central Bank is planning a digital euro pilot for next year, and China continues to expand the cross-border utility of its e-CNY.
