Congress has sent President Trump legislation that would bar the Federal Reserve from issuing a central bank digital currency until the end of the decade. The bill cleared the House on Tuesday and now heads to the White House for a signature or veto.
What the legislation does
The measure prohibits the Fed from creating, issuing, or circulating any digital dollar for at least the next seven years. The ban runs through 2030. It applies to any form of central bank digital currency—a direct liability of the central bank, unlike the commercial bank money most people use today.
Supporters argue the pause gives lawmakers time to study privacy, security, and economic implications. Critics say the moratorium could leave the U.S. behind other nations already testing digital currencies.
Tucked into a housing bill
The CBDC prohibition is part of the 21st Century ROAD to Housing Act, a broader package aimed at addressing housing affordability and regulatory reform. That connection surprised some observers—the housing bill had moved through committee with little public debate on digital currency issues.
The provision was added during floor negotiations, according to congressional aides. The final version passed with bipartisan support in both chambers.
What happens next
President Trump now has 10 days to sign or veto the bill, or let it become law without his signature. The White House hasn't issued a formal position on the CBDC ban.
If enacted, the Fed would have to halt any planning or pilot programs related to a digital dollar. The central bank had previously explored the concept through research papers and small-scale experiments but never committed to launching one.
The bill doesn't affect private digital currencies like stablecoins or cryptocurrencies. It only targets a government-issued digital currency.
Lawmakers on both sides have vowed to revisit the issue before the 2030 deadline expires. The debate over privacy, surveillance, and financial inclusion is far from settled.
