On June 22, 2026, the U.S. Senate passed sweeping bipartisan housing legislation—the 21st Century ROAD to Housing Act—aimed primarily at increasing housing supply and improving affordability. Tucked within that package, however, is a provision with potentially far-reaching consequences for the future of digital finance: a statutory prohibition on U.S. central bank digital currency (CBDC) through December 31, 2030.
The bill bars the Federal Reserve from “issuing or creating” a CBDC or any substantially similar digital asset. With the bill now heading to the House of Representatives, where it is widely expected to pass, the United States is formalizing an increasingly firm policy stance against CBDCs, one that contrasts sharply with developments abroad.
What is a CBDC and Why is Congress Opposed?
A CBDC is a digital form of a country’s sovereign currency issued and backed directly by its central bank. CBDCs differ from existing payment mechanisms in several important respects. As compared to bank deposits, which are liabilities of commercial banks, a U.S. CBDC would be a direct liability of the Federal Reserve. CBDCs differ from cryptocurrencies in that the former are centrally issued and controlled, rather than decentralized and permissionless. And, unlike stablecoins—privately issued instruments typically backed by reserves—CBDCs constitute public money that may carry legal tender status.
Proponents argue that CBDCs could enable faster, cheaper, and more inclusive payments. However, a strong and increasingly cross-cutting coalition in Washington views them as posing significant legal and policy risks. The primary objections generally fall into three key categories:
- Privacy and Financial Surveillance: Critics argue that a retail CBDC could enable unprecedented visibility into consumer transactions, raising fears of government financial surveillance.
- Disruption to Credit Intermediation: Because a CBDC would represent a direct claim on the Federal Reserve, policymakers warn that widespread adoption could accelerate deposit flight from commercial banks during periods of stress, potentially disrupting traditional credit intermediation.
- Programmability and Centralized Control: The programmability of CBDCs has prompted concerns that, at least in theory, a digital dollar could be designed to condition or restrict how funds are spent, implicating broader questions about economic liberty and state power.
The 21st Century ROAD to Housing Act directly responds to these concerns. The text explicitly stipulates that the Fed may not issue or create a CBDC, directly or indirectly, through financial institutions or other intermediaries. Although the prohibition formally expires on December 31, 2030, it effectively establishes that the Federal Reserve cannot proceed with a retail CBDC absent explicit congressional authorization—ensuring that any future digital dollar would require affirmative legislative approval.
Codifying the Executive Branch Strategy
The Senate’s legislative action does not exist in isolation. It hardens a policy stance established early by the White House.
On January 23, 2025, President Donald Trump signed Executive Order 14178, “Strengthening American Leadership in Digital Financial Technology.” This sweeping directive marked a sharp departure from the prior administration’s exploration of a digital dollar. The Executive Order: (1) prohibited all federal agencies from undertaking any action to establish, issue, or promote a CBDC; (2) ordered the immediate termination of any ongoing digital currency creation initiatives within federal agencies (unless required by law); and, (3) promoted the growth of legitimate, private sector dollar-backed stablecoins to reinforce the dollar’s global role.
While an executive order can be easily revoked by a subsequent administration, the housing bill, if enacted, would codify these protections into federal statutory law.
The Federal Reserve’s Evolving Position
The Federal Reserve has historically taken a cautious, research-oriented approach to CBDCs. Its 2022 discussion paper highlighted both potential benefits and risks but stopped short of endorsing issuance.
That caution has hardened into opposition. During 2025 congressional testimony, then-Chair Jerome Powell stated unequivocally that the Fed would not develop a CBDC during his tenure, emphasizing that any such initiative would require clear congressional authorization.
More recently, incoming Fed Chair Kevin Warsh has taken an even more definitive stance. In his 2026 confirmation process, Warsh described a U.S. CBDC as a “bad policy choice,” warning that it could pose systemic risks and undermine financial privacy. Rather than defending government-run infrastructure, Warsh’s Fed has signaled an approach that leans heavily into private sector innovation.
This alignment between the White House, Congress, and the Federal Reserve is notable; for the first time, all three institutional actors appear broadly convergent in opposing a U.S. CBDC—at least in the near term.
Global Divergence: China and the European Union
While the United States moves toward prohibition, much of the rest of the world is accelerating CBDC development. According to the Atlantic Council CBDC Tracker, more than 140 countries—representing over 98% of global GDP—are now exploring CBDCs in some form. That number was only 87 in 2022. There are 77 countries in the advanced phase of exploration, which includes development, pilot, or launch.
The People’s Bank of China remains a global frontrunner in the CBDC race among major economies. Beijing has aggressively scaled its digital yuan (e‑CNY), which has already processed substantial transaction volumes across retail and public-sector use cases. Through cross-border pilot programs and partnerships with foreign financial institutions, China is also exploring the international use of its CBDC. These initiatives are widely viewed as part of broader efforts to reduce reliance on traditional Western-dominated payment infrastructure and to promote the global role of the yuan.
The European Central Bank is moving more cautiously but steadily toward a digital euro. As of 2026, the project is in an advanced preparation phase, with a formal issuance decision anticipated. The ECB frames the digital euro as a means of preserving “payment sovereignty” in an increasingly digital economy, particularly in light of the dominance of non-European payment platforms and the rise of private stablecoins.
Conclusion
The bill makes clear the U.S. opposition to a CBDC. At the same time, the U.S. ban is deliberately narrow in that it includes a crucial legal carve-out for private stablecoins, explicitly shielding any dollar-denominated currency that is “open, permissionless, and private.” The message is clear: in the United States, at least for the foreseeable future, the future of digital money will be shaped not by a government-issued digital dollar, but by a regulatory framework designed to facilitate private-sector innovation.
