US Senate Moves to Block CBDC With Ban in Major Housing Bill

Senate Votes to Ban CBDC Issuance

The United States Senate voted Thursday to include a central bank digital currency (CBDC) ban in the broader housing affordability legislation known as the 21st Century Road to Housing Act.

The amendment passed by an overwhelming 89–10 vote, signaling strong bipartisan support.

Under the provision, the Federal Reserve would be prohibited from issuing or creating a CBDC until December 31, 2030.

The legislation explicitly states that neither the Federal Reserve nor any regional Federal Reserve bank may create or distribute a digital currency that functions similarly to a CBDC.

Stablecoins Not Affected by the Ban

While the amendment targets government-issued digital currency, it does not restrict private digital dollars.

Specifically, the bill allows dollar-denominated cryptocurrencies that are “open, permissionless, and private” a description commonly applied to stablecoins.

Stablecoins have become a key part of U.S. digital asset policy discussions in recent years.

Donald Trump and Scott Bessent have previously argued that dollar-pegged stablecoins could strengthen the global role of the U.S. dollar while avoiding the risks associated with government-issued digital money.

Lawmakers Warn About Financial Surveillance

The amendment follows growing opposition to CBDCs among lawmakers who believe such systems could increase government control over citizens’ financial activity.

More than 30 U.S. lawmakers recently signed a letter urging the Senate to pass a permanent ban on CBDCs, rather than a temporary moratorium.

Ralph Norman, one of the signatories, argued that a CBDC could undermine financial freedom.

Concerns Over Programmable Money

Critics have also raised concerns that CBDCs could enable governments to monitor transactions or impose restrictions on how money is used.

Warren Davidson has long warned that digital currencies issued or regulated by the government could function as tools of financial surveillance.

Davidson has also criticized aspects of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, arguing that regulatory frameworks might allow authorities to exert greater control over financial activity.

According to Davidson, programmable money systems could theoretically be used to freeze funds, monitor transactions, or impose automated taxes.

Economic Experts Raise Privacy Concerns

Some financial experts share similar concerns about the long-term implications of central bank digital currencies.

Billionaire hedge fund manager Ray Dalio recently warned that CBDCs could expand the government’s oversight over financial transactions.

He also pointed out that most CBDC proposals do not include yield mechanisms, meaning they would not protect users from inflation while still allowing authorities to track or restrict transactions.

Growing Global CBDC Debate

The U.S. debate over CBDCs mirrors discussions happening worldwide as governments evaluate digital versions of national currencies.

Many central banks are exploring CBDC development as a way to modernize payment systems and compete with private digital currencies.

However, in the United States, political resistance has grown, particularly among lawmakers who view private cryptocurrencies and stablecoins as preferable alternatives to state-issued digital money.

If the housing bill passes in its final form, the temporary CBDC prohibition could shape U.S. digital currency policy for the remainder of the decade.