Key Highlights
- The 21st Century ROAD to Housing Act bars the Federal Reserve from issuing a retail CBDC directly or through intermediaries.
- The prohibition defines CBDC as a dollar-denominated digital asset that is a direct liability of the Federal Reserve.
- The ban includes a sunset clause and will expire on December 31, 2030.
A ban on the Federal Reserve issuing a retail central bank digital currency (CBDC) has resurfaced in Senate legislation, months after a similar effort failed to make it into last year’s National Defense Authorization Act.
The language appears in Title X of the 21st Century ROAD to Housing Act, released ahead of Senate consideration by Banking Committee Chairman Tim Scott and Ranking Member Elizabeth Warren.
Financial journalist Eleanor Terrett flagged the development, noting that the CBDC ban had been revived inside the broader housing package.
While the legislation is primarily aimed at addressing housing affordability, Title X introduces a standalone amendment to the Federal Reserve Act focused squarely on digital currency.
What the bill does
The proposal would amend the Federal Reserve Act by inserting a new section — “SEC. 16A. CENTRAL BANK DIGITAL CURRENCY.”
Definition of a CBDC
The bill defines a central bank digital currency as a digital asset that:
- “is denominated in United States dollars;”
- “is a United States currency;”
- “is a direct liability of the Federal Reserve System;” and
- “is widely available to the general public.”
The text further clarifies that the term “digital asset” carries the same meaning as defined in Section 2 of the GENIUS Act (12 U.S.C. 5901).
This definition makes clear that the prohibition applies specifically to a retail, consumer-facing digital dollar issued as a direct liability of the Federal Reserve.
The core prohibition
The legislation states: “Except as provided in subsection (e), 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.”
The language is sweeping. It bars:
- Direct issuance of a retail CBDC by the Federal Reserve to consumers; and
- Indirect issuance through banks, financial institutions, or other intermediaries.
The inclusion of “any digital asset that is substantially similar to a central bank digital currency” is designed to prevent workarounds that would replicate a retail CBDC under a different name or structure.
Privacy-based exception
The bill includes a narrow exception.
It states that the prohibition “shall not prohibit any dollar-denominated currency that is open, permissionless, and private, and fully preserves the privacy protections of United States coins and physical currency.”
This carveout appears aimed at ensuring that private-sector digital dollar innovations or open blockchain-based systems are not automatically restricted—provided they preserve the privacy characteristics associated with physical cash.
Sunset clause in 2030
The prohibition is not permanent. The legislation includes a sunset provision stating: “The provisions of this section shall cease to be effective on December 31, 2030.”
Unless Congress acts to extend or revise the language, the ban would automatically expire at the end of the decade.
Housing bill context
The CBDC language is embedded within a broader housing affordability package that lawmakers describe as the most comprehensive bipartisan housing legislation in decades.
In a joint release, Chairman Scott said, “2026 is the year of affordability. This week, the Senate is set to vote on housing affordability legislation, the 21st Century ROAD to Housing Act, and my colleagues and I stand ready to deliver it to President Trump’s desk, fulfilling the promise he made to Americans at the State of the Union.”
He also added, “Not only is this bill about cutting regulatory red tape, lowering costs, and expanding housing supply while generating no new spending, but it’s about making sure people like the single mom who raised me in North Charleston, South Carolina, have even greater access to economic opportunity and the American dream of homeownership.”
Ranking Member Warren said, “The 21st Century ROAD to Housing Act will boost housing supply and bring down costs. The package includes the vast majority of the Senate’s unanimously supported ROAD to Housing Act, incorporates bipartisan ideas from the House, and takes a good first step to rein in corporate landlords that are squeezing families out of homeownership. Congress should pass this package and continue working on further legislation to combat our nation’s housing crisis.”
Broader policy implications
The Federal Reserve has repeatedly stated it would not issue a digital dollar without explicit congressional authorization. If enacted, this measure would formally restrict the central bank from introducing a retail CBDC, even through intermediaries, until at least 2030.
The resurfacing of the CBDC ban underscores that digital currency remains a politically sensitive issue, even as lawmakers advance bipartisan efforts in other areas such as housing supply and affordability.
With Senate consideration imminent, attention will now turn to whether the CBDC language remains intact through floor debate and final passage—and how it shapes the trajectory of U.S. digital dollar policy for the remainder of the decade.
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