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House Republicans Push Anti-CBDC Provision Into 2025 Defense Spending Bill: What You Need to Know

House Republicans Push Anti-CBDC Provision Into 2025 Defense Spending Bill: What You Need to Know

Published:
2025-08-23 06:15:02
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In a bold move, House Republicans have successfully embedded an anti-Central Bank Digital Currency (CBDC) provision into the 2025 National Defense Authorization Act (NDAA). The measure, which passed the House by a narrow 219-210 vote, aims to block the Federal Reserve from developing or testing a U.S. CBDC, citing concerns over financial privacy and government overreach. This article breaks down the political showdown, the implications for digital currency, and why this debate is far from over.

Why Are House Republicans Blocking a U.S. CBDC?

The anti-CBDC amendment, introduced as part of the NDAA, prohibits the Federal Reserve from creating a "programmable, surveillance-heavy" digital dollar. Republicans argue that a CBDC WOULD grant unelected bureaucrats unprecedented control over Americans' financial transactions. "A CBDC is a dangerous threat to liberty—it’s essentially a tool for government surveillance," declared Representative Byron Donalds in a fiery tweet following the vote. The provision exempts private, permissionless dollar-backed stablecoins, ensuring they remain outside the Fed’s oversight.

How Does This Tie Into Trump’s Executive Order?

The amendment codifies a 2024 executive order by former President Donald Trump, which sought to prevent the Fed from pursuing a CBDC. Majority Whip Tom Emmer emphasized that the legislation ensures "no unelected bureaucrat can trade Americans’ financial privacy for a CCP-style surveillance tool." The WHITE House has backed the measure, framing it as a defense of constitutional freedoms—though critics accuse Republicans of stifling innovation.

What’s the NDAA’s Role in This Fight?

The NDAA, a must-pass defense funding bill, has become a battleground for crypto policy. Republicans stalled House proceedings for over nine hours, refusing to advance three key crypto bills—the CLARITY Act, the GENIUS Act, and the Anti-CBDC Surveillance State Act—without guarantees on the anti-CBDC provision. "Attaching this to the NDAA ensures it gets serious consideration in the Senate," said Emmer. The move underscores how deeply digital currency policy has infiltrated broader fiscal debates.

Who Supports—and Opposes—the Anti-CBDC Push?

Senators Ted Cruz, Kevin Cramer, and Thom Tillis argue that CBDCs could turn the Fed into a retail bank, enabling financial surveillance. The American Bankers Association (ABA) warns a Fed-issued CBDC could disrupt credit markets and monetary policy.Privacy advocates like Holonym co-founder Nanak Nihal Khalsa counter that the U.S. stance could spur better, decentralized alternatives. Meanwhile, the Atlantic Council reports 135 countries are exploring CBDCs, with over half in advanced stages—highlighting how the U.S. risks falling behind.

What’s Next for the Legislation?

The bill now heads to the Senate, where its fate is uncertain. While the House’s version includes the anti-CBDC clause, Senate Democrats have historically been more open to digital currency research. If passed, the provision would mark a major setback for the Fed’s digital dollar experiments—but with global CBDC adoption accelerating, this debate is just heating up.

FAQs: Anti-CBDC Provision Explained

What does the anti-CBDC provision actually do?

It bans the Federal Reserve from developing, testing, or launching a central bank digital currency without explicit congressional approval.

Why are Republicans against CBDCs?

They argue CBDCs could enable government surveillance and erode financial privacy, citing China’s digital yuan as a cautionary tale.

Could this impact crypto markets?

Potentially. By favoring private stablecoins (like those traded on exchanges such as BTCC), the provision could boost demand for decentralized alternatives.

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