The U.S. Senate has taken a significant step against the creation of a central bank digital currency (CBDC) by passing a sweeping housing bill that includes a provision banning the Federal Reserve from issuing a retail CBDC, often referred to as a "digital dollar." The Senate passed the 21st Century ROAD to Housing Act on Thursday with overwhelming bipartisan support, voting 89 to 10.
The attached CBDC provision explicitly prohibits the creation, issuance, and development of any retail CBDC or similar digital asset intended for public use. This ban is not permanent; it is set to expire on December 31, 2030, effectively blocking any U.S. CBDC until at least 2031. The measure was added as a legislative "sweetener" to garner wider support for the housing package.
Despite the strong Senate vote, the legislation faces considerable hurdles. The bill must now pass the House of Representatives, where House Republicans have voiced opposition. Key figures, including House Financial Services Committee Chair Rep. French Hill (R-AR), have expressed concerns about the bill's details and the desire for a permanent CBDC ban, unlike the temporary one in the Senate version. Further negotiations or a conference committee could delay or alter the final legislation.
Adding another layer of uncertainty, President Donald Trump has threatened to veto any legislation until lawmakers pass the separate SAVE Act, a controversial voting reform bill. Reports indicate the president has shown a lack of enthusiasm for the housing package itself.
The debate over a U.S. CBDC has been highly politicized, with many conservative lawmakers arguing such a currency could enable government surveillance of citizens' financial transactions. The dissenting votes in the Senate largely came from conservatives like Sens. Ted Cruz, Mike Lee, and Rand Paul, who wanted a permanent ban, alongside Democrat Sen. Brian Schatz.
