The US Senate has moved to block the Federal Reserve from putting government-issued digital dollars (CBDC) into the hands of Americans — at least for now. This ban is part of a wider housing affordability package and comes with an expiry date.
Housing project with a hidden twist
The 21st Century ROAD to House Act is primarily about affordable housing. But Title X of the bill is a stand-alone amendment to the Federal Reserve Act that has nothing to do with mortgages or rentals.
It targets the central bank’s digital currency – a digital form of the US dollar issued by the government. Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren reportedly released the text of the bill together ahead of the Senate vote, an unusual pairing given how historically the two lawmakers have opposed financial regulation.
The US Federal Reserve. Image: Richard Sharrocks/Getty Images
The limitation is wide in scope. It prohibits the Fed from issuing retail digital dollars not only itself, but through banks and other financial intermediaries.
Reports say that the bill would even include any digital asset that would act like a central bank’s digital currency by another name – removing potential avenues for pre-emption.
🚨NEW: Remember the CBDC ban that didn’t make it into the National Defense Authorization Act (NDAA) last year? It has just been rebuilt @BankingGOPA 21st Century ROAD to Home Act was posted a few minutes ago.
Specifically, it provides the Fed, directly or indirectly, with a… pic.twitter.com/tfZd4JX4mq
— Eleanor Terrett (@EleanorTerrett) March 2, 2026
What counts as a CBDC
The draft law shows exactly what it is aimed at. Central bank digital currency, or commonly known as CBDC, is a dollar-denominated digital asset that is the direct responsibility of the Federal Reserve and is available to ordinary consumers, according to the proposed law.
This definition draws a sharp line between a government-issued digital dollar and private sector options such as stablecoins or crypto assets.
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However, there is an exception to the carving. Any digital currency that is open, permissionless and private – and offers the same privacy protections as physical cash – cannot be banned by a ban.
Reports state that this exception is intended to ensure that private innovations in digital payments do not accidentally get caught up in government-only legislation.
CBDC: The clock is already ticking
The CBDC ban doesn’t mean it will last forever. Under the terms of the bill itself, the ban would expire on December 31, 2030. If Congress doesn’t act again before then, the door to the retail digital dollar will automatically open.
This sunset clause shows that lawmakers aren’t always opposed to the idea — they just want it to take more time before anything goes ahead.
The Federal Reserve has already publicly stated that it will not issue a digital dollar without express authorization from Congress.
So, from a practical point of view, the bill reinforces the position that the central bank has already taken. However, writing this position into law has real weight.
Featured image from The Daily Economychart from TradingView
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