The U.S. Senate voted 85-5 Tuesday to pass the 21st Century ROAD to Housing Act, a wide-ranging bill that includes a four-year ban on any Federal Reserve-issued central bank digital currency. The legislation now heads to the House, where a vote could come within days.
A housing bill with a digital-currency twist
The bill's main purpose is housing policy—streamlining regulations and boosting supply—but the CBDC rider has drawn the most attention. Under the provision, the Fed would be barred from issuing a digital dollar until at least 2030. Supporters of the ban argue a government-run digital currency could threaten privacy and give the central bank too much control over Americans' finances.
The Senate vote was lopsided: 85 in favor, 5 against. No amendments were adopted to strip the CBDC language. The bill's sponsors have said the ban is a temporary measure while lawmakers study the implications of a digital dollar. The Fed itself has been exploring a CBDC for years but has made no decision to launch one.
What the ban means for the Fed's digital-dollar project
The Federal Reserve has been conducting research and pilot programs on a CBDC, often called a digital dollar. The ban would effectively freeze that work for four years. It does not affect existing digital payment systems like FedNow, the central bank's instant-payment service, which is not a CBDC.
Critics of the ban, including some Democratic senators who voted no, say the moratorium could leave the U.S. behind other countries already testing CBDCs. China, for example, has run large-scale digital yuan pilots. But supporters say moving slowly is the right call until privacy and security concerns are resolved.
Next stop: the House
The House is expected to take up the bill quickly. Speaker Mike Johnson has not publicly set a date, but leadership sources told GFdaily the bill could reach the floor as early as next week. The House Financial Services Committee has already held hearings on CBDC risks, and some key Republicans have signaled support for the ban.
If the House passes the bill without changes, it goes to President Biden's desk. The White House has not issued a formal position on the CBDC ban, though Treasury Secretary Janet Yellen has previously expressed caution about a digital dollar. Should the House amend the bill, the two chambers would need to reconcile differences before final passage.
One unresolved question: whether the ban's four-year window is long enough. Some lawmakers have already floated extending it to 2035. For now, the clock is ticking on the House vote.
