The United States Senate has passed legislation that would prohibit the Federal Reserve from issuing a retail central bank digital currency until at least December 31, 2030. The provision was attached to the 21st Century ROAD to Housing Act, a sprawling housing affordability package, and passed by an overwhelming 85-5 margin on Monday night.
The bill defines a CBDC narrowly as a dollar-denominated digital asset that constitutes US currency, represents a direct liability of the Federal Reserve, and is widely available to the general public. An additional "substantially similar" clause aims to prevent potential workarounds that could achieve the same outcome through indirect means.
Significantly, the legislation explicitly carves out private, permissionless stablecoins such as USDC and USDT from its restrictions. This distinction effectively removes the theoretical prospect of a government-backed retail digital dollar competing with private issuers until at least 2031. For stablecoin operators like Circle and Tether, the provision locks in a four-year window without a state-backed rival in the retail digital currency space.
The measure is largely pre-emptive. President Trump signed an executive order against CBDC development in January 2025, Treasury Secretary Scott Bessent has stated a digital dollar is off the table, and the Federal Reserve maintains that any US digital currency remains purely in theoretical research. New Fed Chair Kevin Warsh characterized a CBDC as a "bad policy choice" during his nomination hearing. The legislation therefore codifies an existing policy stance into durable statute—unlike an executive order, it cannot be reversed by a future administration with a single stroke of the pen.
The US position now stands in stark contrast to other major economies. The European Central Bank is advancing toward a digital euro pilot next year ahead of a full launch by 2029, the European Parliament greenlit the project in February, and China has been developing its digital yuan under the People's Bank of China for years. South Korea has also progressed its CBDC pilot into a second phase focused on integrating deposit tokens into established banking frameworks. Where those jurisdictions treat a CBDC as public financial infrastructure, the US is instead betting on regulated private stablecoins to carry dollar-denominated digital payments.
The bill now moves to the House of Representatives, where leadership hopes to advance it to President Trump's desk as early as Tuesday. However, the path is not guaranteed. Some House conservatives have objected that a four-year ban is too weak and are pushing for a permanent prohibition, while certain housing-industry groups oppose the bill's restrictions on institutional homebuyers. If the legislation clears the House and is signed into law, the CBDC prohibition would remain in effect only until the end of 2030, leaving the long-term debate unresolved.
