Summary
- The U.S. Senate voted 85-5 on Monday to pass the 21st Century ROAD to Housing Act, which is now set for a swift vote in the House.
- This bipartisan bill includes a clause that prevents the Federal Reserve from launching a central bank digital currency until 2030, while allowing private stablecoins.
- Currently, there is no active U.S. CBDC initiative, and both Fed Chair Kevin Warsh and former President Trump have expressed opposition to the idea.
A potential ban on a government-operated digital dollar is nearing enactment, thanks to an unrelated housing legislation.
On Monday night, the Senate passed the 21st Century ROAD to Housing Act with an 85-5 vote. This bipartisan effort aims to enhance housing supply and prevent large investors from acquiring single-family homes. Nested within this legislation is a provision that prohibits the Federal Reserve from issuing a central bank digital currency until the end of 2030.
The bill states that the Fed "may not issue or create a central bank digital currency or any digital asset that is substantially similar" to it, whether directly or through a financial institution or any intermediary. Even after the ban expires in 2030, the central bank would require explicit congressional approval to explore a digital dollar.
This legislation specifically exempts private stablecoins, allowing for any "dollar-denominated currency that is open, permissionless, and private," thus leaving entities like Circle and Tether unaffected under last year's GENIUS Act.
Current State of CBDCs in the U.S.
There is no ongoing federal initiative to develop a CBDC. The Federal Reserve has not advanced beyond the research phase, and both Chair Kevin Warsh and former President Donald Trump have publicly voiced their opposition to a digital dollar, which conservative critics label as a tool for financial surveillance. Trump signed an executive order in January 2025 directing his administration to refrain from pursuing one.
Senators portrayed the vote as a notable bipartisan achievement, with Banking Committee Chair Tim Scott (R-SC), who collaborated with Ranking Member Elizabeth Warren (D-MA) on the bill, stating on the Senate floor that "housing prices are too darn high and housing supply is too low."
Prior to the bill’s passage, Warren remarked that the outcome demonstrated "that bipartisan legislation doesn't have to be the weakest, most milquetoast agreement," calling it the most significant housing initiative in three decades. Senate Minority Leader Chuck Schumer stated it "shows Americans how we should govern."
Discussions on the Senate floor centered on housing supply and corporate landlords, rather than the digital dollar ban that accompanied the bill.
This digital dollar restriction was included as a political incentive to gain support from House Republicans and expedite the bill’s progress. The Senate initially added it in March, passing that iteration with a vote of 89-10, and negotiators reached an agreement last week on the reconciled text after extensive discussions with the House.
Some conservative members in the House have suggested that the ban should be permanent, with Rep. Anna Paulina Luna (R-FL) asserting that "CBDCs are bad for everyone." Nonetheless, House leaders are anticipated to address the bill promptly, possibly as early as Tuesday, before it is presented to Trump for approval.
The U.S. decision to step back from a CBDC contrasts sharply with global trends. The European Central Bank is developing a digital euro, with a pilot launch planned for next year and a full rollout expected by 2029. Meanwhile, China has been increasing the cross-border application of its e-CNY, recently signing agreements with 26 financial institutions, according to Reuters. Currently, three countries have implemented a CBDC, with many others either piloting or in the development phase, as indicated by the Atlantic Council.