Experts Explain the CBDC Ban for the U.S. Federal Reserve

The U.S. Senate has approved a bill that includes a ban on the issuance of a digital dollar by the Federal Reserve (Fed) until 2030. The vote saw 85 senators in favor and five against. The bill still needs to pass the House of Representatives and receive President Donald Trump's signature. 

Context of the Decision

The CBDC ban is part of the affordable housing 21st Century ROAD to Housing Act—an unusual legislative tactic that allows Republicans to expedite the adoption of the provision. 

The amendment prohibits the Fed from "issuing or creating a central bank digital currency or any digital asset substantially similar to a CBDC, directly or indirectly—through a financial institution or intermediary." At the time of the law's passage, the Fed had not engaged in any practical work on a digital dollar. 

This initiative effectively codifies the course set by Trump in January 2025, when he signed an executive order banning the administration from taking steps toward issuing a digital dollar, calling it a threat to "the stability of the financial system, citizens' privacy, and U.S. sovereignty."

The primary objection is not against digital money per se, but against a government-controlled framework. If the Fed issues a digital dollar directly, the government technically gains access to all transactions in real-time, explained Alexander Peresichan, CEO of Technobit, in a comment to ForkLog.

"That’s why Trump supporters view CBDCs not merely as a new form of the dollar, but as a potential tool for financial surveillance. The Chinese model of the digital yuan (e-CNY) is often cited as an example, where the government has much broader capabilities to control money flows," he stated.

Moreover, the expert pointed out that private stablecoins will not replace state-issued digital currencies, as they serve different purposes:

"Stablecoins like USDT remain tools of the private market, while CBDCs are part of the monetary system and a means of controlling money circulation."

Economic Argument

In addition to privacy concerns, opponents of CBDCs present a structural argument: if citizens can hold money directly in Fed digital wallets, some deposits will shift away from commercial banks. Igor Plotnikov, CEO of Millpay, noted that this is why the Trump administration is betting on private dollar stablecoins.

"This approach allows for the dollar's dominance in the digital economy without radically restructuring the existing financial system," he told ForkLog.

Both Fed chairmen have consistently opposed the digital dollar. Jerome Powell stated that even with the launch of a CBDC, management would be handed over to commercial banks. His successor, Kevin Warsh, called the digital dollar "a misguided political decision."

While the U.S. Bans, Others Expand

On the opposite end is China. By November 2025, the volume of payments in e-CNY reached 16.7 trillion yuan ($2.37 trillion), with 3.48 billion transactions processed. The number of personal wallets reached 230 million, and corporate wallets totaled 18.84 million. In June 2026, the People's Bank of China connected 26 banks, including those from Singapore, Thailand, the UAE, Qatar, Brazil, and other countries, to the cross-border CBETS system.

Igor Plotnikov estimates that if current integration rates continue, CBETS could form "a partial functional alternative to SWIFT in certain corridors within five years"—primarily in settlements between countries interested in reducing their dependence on dollar infrastructure.

Starting January 1, 2026, e-CNY transitioned to version 2.0. Retail balances are now liabilities of commercial banks—they can be used for partial reserve and lending, covered by deposit insurance; major state banks are already offering interest rates on demand deposits. Non-bank providers must maintain full coverage. 

Despite this, e-CNY retains its status as legal tender: PBOC advisor Jianhua Zhang describes the reform as an expansion of functions rather than a change in the nature of the instrument. The deputy head of the PBOC, Lu Lei, explicitly called this model an alternative to stablecoins—it prevents fund outflows from banks and is compatible with the existing financial infrastructure.

Meanwhile, the European Central Bank completed the preparatory phase for the digital euro in October 2025. Pilot testing with licensed payment providers is scheduled for the second half of 2027, with a large-scale launch planned for 2029. The legislative framework (DER regulation) is expected to be approved in 2026.

Earlier, ECB Executive Board member Piero Cipollone explained the need for a European digital payment system as a fight for the region's sovereignty.

In the context of economic rivalry, Igor Plotnikov believes that the CBDC ban neither weakens nor strengthens the dollar's position directly. 

"This decision highlights the differing approaches: the U.S. is betting on private innovative infrastructure, while China is developing a centralized model with a high level of government control over transactions," he concluded.

It is worth noting that in May, Donald Trump signed an order integrating digital assets into the traditional financial system and revising the rules for crypto companies' access to payment infrastructure.