## U.S. Congress Passes Law Banning the Federal Reserve from Issuing CBDCs

In June 2026, the U.S. Congress—both the House and the Senate—successively passed the *21st Century ROAD to Housing Act* with large majorities. A closely watched provision was embedded in the bill: it clearly prohibits the Federal Reserve and its subordinate reserve banks from “directly or indirectly” issuing or piloting retail central bank digital currencies (CBDCs) aimed at the public, or any digital assets that are substantially similar to CBDCs. The ban remains effective until December 31, 2030.

Republican lawmakers were the driving force behind this provision. Their core rationale is concern that retail CBDCs would give the government the ability to monitor citizens’ fund flows in real time, potentially eroding financial privacy rights, and creating direct competition between the central bank and commercial bank deposits. As early as January 2025, Trump signed an executive order to halt federal agencies from pursuing CBDCs, and the new law upgrades that stance into a legal restriction with a clearly defined timeline.

Three boundary conditions should be noted: first, the ban applies only to retail CBDCs; the development of wholesale digital currencies used for interbank settlement is not restricted. Second, private U.S. dollar stablecoins (such as USDC and USDT) are explicitly exempted and are regarded as legitimate digitized “U.S. dollars” that are “open, permissionless, and private.” Third, the ban is temporary rather than a permanent repeal, and could be reconsidered after 2030.

In terms of impact, this effectively puts the Federal Reserve’s issuance of a “digital dollar” on pause—at least for five years. During that period, the digitized U.S. dollar will be led by private stablecoins, benefiting issuers such as Circle and Tether. Critics, however, point out that amid the accelerated advancement of RMB and euro CBDCs, America’s self-imposed limits may weaken the dollar’s influence in shaping cross-border digital currency standards.