Senate Approves Amendment Prohibiting CBDCs in Bipartisan Housing Legislation
A measure preventing the Federal Reserve from creating a central bank digital currency has been incorporated into legislation addressing housing affordability.
On Thursday, the United States Senate approved an amendment to the 21st Century Road to Housing Act that would prevent the Federal Reserve from creating a central bank digital currency (CBDC).
According to the amendment contained within the legislation, the ban on CBDCs will be enforced through Dec. 31, 2030. The bill, which secured approval with an 89-10 vote, explicitly stated:
"The Board of Governors of the Federal Reserve System or a Federal Reserve Bank may not issue or create a central bank digital currency or any digital asset that is substantially similar to a central bank digital currency, directly or indirectly through a financial institution or other intermediary."
That said, the legislation does not ban digital currencies denominated in dollars that maintain characteristics of being "open, permissionless, and private," including stablecoins.
President Donald Trump and US Treasury Secretary Scott Bessent have promoted stablecoins pegged to the dollar as a mechanism to maintain US dollar dominance globally, whereas Trump alongside other Republican legislators have adopted a strict position opposing CBDCs.
Lawmakers slam CBDCs as authoritarian surveillance technology
On March 6, more than 30 US lawmakers put their signatures on a letter calling on the Senate to enact a permanent prohibition on CBDCs instead of implementing a temporary ban.
"A CBDC would give unelected bureaucrats unprecedented power over Americans' finances and threaten basic economic freedom," Representative Ralph Norman, one of the signatories of the letter, said.
Representative Warren Davidson, who has been a persistent opponent of CBDCs, has additionally criticized stablecoins pegged to the dollar that are regulated, arguing they possess identical surveillance capabilities to CBDCs.
Warren further cautioned that regulatory frameworks established under the Guiding and Empowering Nation's Innovation for US Stablecoins (GENIUS) Act establish a pathway to "control" and "coerce" the American population via financial surveillance methods and programmable currency.
Ray Dalio, a hedge fund manager, also issued a recent warning that CBDCs would enhance governmental control over individuals' financial affairs.
"There will be no privacy, and it's a very effective controlling mechanism by the government," Dalio said in an interview with independent journalist Tucker Carlson.
He further noted that CBDCs are unlikely to be yield-bearing, which means they would not provide protection against inflation and could be subject to automatic taxation or freezing by governmental authorities.