TLDR
- The Senate approved the 21st Century Road to Housing Act with an 89-10 vote, including an amendment banning CBDCs.
- Federal Reserve is prohibited from launching a central bank digital currency through December 31, 2030.
- Private digital currencies, including stablecoins that are permissionless and maintain privacy, remain unaffected.
- House approval remains uncertain as representatives may contest certain provisions of the legislation.
- Additional complications arise from President Trump’s pledge to veto bills until voter-ID requirements pass.
On Thursday, the United States Senate approved significant housing legislation that contains a provision temporarily preventing the Federal Reserve from launching a central bank digital currency.
The legislation, titled the 21st Century Road to Housing Act, secured strong bipartisan support with an 89-10 vote. Buried within the final sections of the 302-page document is an amendment that prevents the Fed from creating a CBDC, or any comparable digital asset, before the conclusion of 2030.
The restriction covers both direct Federal Reserve action and any attempts to issue such currency through banking institutions or third-party intermediaries.
Stablecoins remain outside the scope of this prohibition. Dollar-backed digital currencies that operate on open, permissionless networks while protecting user privacy continue to be permitted.
Treasury Secretary Scott Bessent and President Donald Trump have expressed support for stablecoins as tools to strengthen American dollar dominance worldwide. Trump alongside Republican legislators have maintained steadfast opposition to central bank digital currencies.
Why Lawmakers Want a CBDC Ban
Over 30 members of Congress submitted correspondence on March 6 requesting the Senate implement a permanent prohibition instead of the temporary measure. Representative Ralph Norman, among those who signed, expressed concern that a CBDC would grant “unelected bureaucrats unprecedented power over Americans’ finances.”
Prominent hedge fund manager Ray Dalio has similarly cautioned against CBDCs, citing privacy concerns. “There will be no privacy, and it’s a very effective controlling mechanism by the government,” Dalio stated during a recent discussion.
Certain legislators have raised additional concerns, suggesting that even regulated stablecoin frameworks could enable surveillance. Representative Warren Davidson has contended that the GENIUS Act, designed to establish stablecoin regulations, could enable financial monitoring through programmable currency features.
Digital Chamber CEO Cody Carbone praised the Senate’s decision. “Financial privacy is a cornerstone of American freedom,” Carbone stated, emphasizing that digital advancement in America “should be led by the private sector.”
The Road Ahead Is Not Clear
Significant obstacles remain for the legislation. House members have indicated potential resistance to the Senate’s version, especially regarding a clause that would restrict the number of residential properties that institutional investors, including private equity companies, may acquire.
Trump has announced his refusal to approve any bills until Congress enacts voter identification legislation. This stipulation introduces additional complexity for the housing measure and other pending legislation, including the Digital Asset Market Clarity Act.
The federal government has not advanced beyond exploratory research regarding a CBDC. Establishing a formal prohibition has remained a priority objective for numerous Republican legislators.
