The United States Senate on Thursday voted to amend the 21st Century Pathway Act, which would ban the Federal Reserve from issuing central bank digital currencies (CBDCs).
According to the changes in the bill, the CBDC ban will be in effect until December 31, 2030. The legislation, which passed 89-10, states:
“The Board of Governors of the Federal Reserve System or the Federal Reserve Bank may not issue or create a central bank digital currency or any digital asset similar to a central bank digital currency directly or indirectly through a financial institution or other intermediary.”
However, the bill does not ban any digital dollar currency that is “open, permissionless and private,” such as stablecoins.
US Treasury Secretary Scott Bessent and President Donald Trump have proposed dollar-pegged stablecoins as a way to extend the hegemony of the US dollar, while Trump and other Republican lawmakers have taken a hard line against CBDCs.
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Lawmakers criticize CBDC as an authoritarian surveillance technology
More than 30 US lawmakers signed a letter on March 6 urging the Senate to pass a permanent ban on CBDCs instead of a temporary moratorium.
“The CBDC gives unelected bureaucrats unprecedented power over Americans’ finances and threatens basic economic freedom,” said Rep. Ralph Norman, one of the letter’s signatories.
Representative Warren Davidson, a long-time critic of CBDC, has also criticized dollar-regulated stablecoins that have control capabilities with CBDC.
Warren also warned that regulations under the Guidance and Enabling Nation Innovation for US Stablecoins Act (GENIUS) provide a way to “control” and “coerce” the US population through financial control methods and programmable money.
Hedge fund manager Ray Dalio also recently warned that a CBDC would expand government control over people’s finances.
“There will be no privacy, and it’s a very effective government surveillance mechanism,” Dalio said in an interview with independent journalist Tucker Carlson.
CBDCs will likely be non-yielding, meaning they won’t offer inflation protection and could be automatically taxed or frozen by the government, he added.
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