Why US Congress Is Moving Forward With a Federal Reserve Digital Dollar Ban Until 2030

The US Senate has approved a major housing affordability bill that includes a provision temporarily barring the Federal Reserve from issuing a central bank digital currency (CBDC), commonly referred to as a digital dollar. The 21st Century ROAD to Housing Act passed the Senate in an 85-5 vote on Monday, June 22, and is expected to receive bipartisan backing in the House of Representatives before potentially reaching President Donald Trump's desk later this month.

The legislation is primarily aimed at improving housing affordability through measures that support manufactured housing development and limit certain institutional home purchases. However, a provision banning the Federal Reserve from creating or issuing a CBDC until the end of 2030 emerged as one of the bill's most closely watched financial policy measures. Donald Trump Says Record Oil Is Flowing Through Strait of Hormuz, Reiterates Iran Nuclear Warning (Watch Video).

CBDC Ban Added to Secure Conservative Support

The CBDC restriction reflects a long-standing objective among many Republican lawmakers and some cryptocurrency industry advocates who oppose the creation of a government-issued digital currency.

Conservatives have argued that a US CBDC could expand government oversight of financial transactions and raise privacy concerns. Those concerns helped drive efforts to include the provision in the housing package despite the Federal Reserve not actively pursuing a digital dollar project. US-Iran Negotiations End, Technical Talks To Continue After Donald Trump Shakes Talks With Threats.

Under the legislation, "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."

If approved by the House and signed by Trump, the restriction would remain in place through the end of 2030.

Fed Had Not Been Pursuing a Digital Dollar

The proposed ban comes despite limited momentum behind a U.S. CBDC initiative. Any effort to launch a digital dollar would likely have required support from Congress, the White House and the Federal Reserve, none of which had been actively advancing such a proposal.

Former Federal Reserve Chair Jerome Powell had previously stated that any potential CBDC would likely be operated through the banking system rather than directly by the central bank, seeking to address concerns about government control over individual financial transactions.

Meanwhile, current Federal Reserve Chair Kevin Warsh expressed opposition to a US CBDC during his nomination hearing, calling it a "bad policy choice."

Donald Trump Administration Opposes CBDC Development

The Senate vote aligns with the Trump administration's broader stance against central bank digital currencies.

In January 2025, President Donald Trump signed an executive order prohibiting federal agencies from pursuing the development of a U.S. CBDC. The order stated that a digital dollar could "threaten the stability of the financial system, individual privacy, and the sovereignty of the United States."

The administration's position has been supported by congressional Republicans, many of whom view privately issued stablecoins as a preferable alternative to a government-backed digital currency.

Global CBDC Projects Continue

While the United States moves toward restricting CBDC development, other major economies continue exploring central bank-issued digital currencies.

The European Central Bank is advancing work on a digital euro, with a pilot program expected next year and a broader rollout targeted for 2029. China has also continued development of its digital yuan through the People's Bank of China.

Supporters of CBDCs argue they can modernize payment systems and improve financial inclusion, while critics warn they could increase government visibility into financial activity and potentially disrupt private-sector banking.

House lawmakers are reportedly considering a fast-track process to approve the Senate-passed housing bill. If the House votes in favor and President Trump signs the legislation, the CBDC ban would become law alongside the bill's housing affordability measures.

The measure would not permanently prohibit a digital dollar but would effectively prevent the Federal Reserve from issuing one until the end of 2030, creating a four-year statutory barrier to any future CBDC initiative.

(The above story first appeared on LatestLY on Jun 23, 2026 07:24 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).