The U.S. Senate has passed a housing bill that includes a ban on CBDCs until 2030, amid ongoing debates on digital currencies.
Summary
- The U.S. Senate voted 85-5 to pass the 21st Century ROAD to Housing Act, which now heads to the House for a vote.
- This bipartisan bill includes a provision that bars the Federal Reserve from creating a central bank digital currency until 2030, while permitting private stablecoins.
- Currently, there is no active U.S. initiative for a CBDC, with both Fed Chair Kevin Warsh and former President Trump opposing the concept.
The U.S. Senate has advanced a significant housing bill that includes a notable restriction on central bank digital currencies (CBDCs). On Monday, the Senate approved the 21st Century ROAD to Housing Act with an overwhelming 85-5 vote. This legislation aims to improve housing availability and curb the influence of large investors in the single-family home market.
Among its provisions, the bill explicitly prohibits the Federal Reserve from issuing a CBDC until 2030. It states that the Fed cannot create or facilitate a digital currency that resembles a CBDC through any intermediary. Even post-2030, the Fed would need congressional approval to consider a digital dollar.
However, the bill does allow private stablecoins, ensuring that entities like Circle and Tether remain unaffected by this legislation. This aligns with the ongoing discourse around the need for digital dollar alternatives that are open and permissionless.
Current Landscape of CBDCs in the U.S.
At present, there is no federal push for a CBDC in the United States. The Federal Reserve has not moved beyond the research stage, and significant figures, including Fed Chair Kevin Warsh and former President Trump, have voiced their opposition to a digital dollar, which some critics argue could lead to enhanced financial surveillance. Trump's administration has already issued directives discouraging the pursuit of a CBDC.
Senators hailed the bill as a landmark bipartisan achievement. Banking Committee Chair Tim Scott (R-SC) emphasized the urgency of addressing high housing prices and limited supply, while Elizabeth Warren (D-MA) described the bill as a substantial step forward after decades of stagnation in housing policy. Senate Minority Leader Chuck Schumer remarked that the bill exemplifies effective governance.
While the housing supply and corporate landlords dominated discussions during the Senate proceedings, the CBDC ban was strategically included to garner support from House Republicans and facilitate quicker passage. This restriction was initially introduced in March and has undergone negotiations to finalize its text.
Some conservative House members advocate for making the CBDC ban permanent. Rep. Anna Paulina Luna (R-FL) stated that "CBDCs are bad for everyone." The House is expected to address the bill promptly, potentially as soon as Tuesday, before sending it to Trump for approval.
In contrast to the U.S. stance, many countries are advancing their own CBDC initiatives. The European Central Bank is working on a digital euro, with pilot tests slated for next year, while China is expanding the use of its digital yuan, recently partnering with 26 financial institutions. According to the Atlantic Council, three nations have already implemented a CBDC, with various others in various stages of development or piloting their own digital currencies.
