US Senate Moves to Block Federal Reserve from Issuing CBDC Through Housing Bill Amendment

The US Senate has inserted a surprising provision into housing legislation that could reshape the future of digital currencies. A standalone amendment to the Federal Reserve Act, buried in Title X of the 21st Century ROAD to Housing Act, WOULD prohibit the Fed from issuing a central bank digital currency (CBDC) either directly or through financial intermediaries.

The bipartisan measure, introduced by Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren, represents an unusual alliance on financial regulation. The ban extends beyond traditional CBDC implementations to cover any digital asset functioning as a government-issued digital dollar under alternative naming conventions.

This development comes as global CBDC initiatives accelerate, with China's digital yuan pilot expanding to 26 cities and the European Central Bank advancing its digital euro project. The US prohibition carries a 2030 sunset clause, creating a defined window for Congressional reassessment of the policy.