The U.S. Senate approved a new bill that, in addition to housing policy reforms, includes a provision prohibiting the Federal Reserve from issuing a central bank digital currency (CBDC).
The Senate passed the 21st Century ROAD to Housing Act, a bill aimed at increasing the housing supply, stimulating construction, and reforming federal housing programs. The document also includes a clause banning the issuance of a digital dollar.
According to the document, the Federal Reserve will be prohibited from creating a central bank digital currency (CBDC) or issuing a digital dollar accessible to the general public. The restriction applies both to the direct issuance of digital currency by the Fed and to issuance through third-party financial institutions.
The bill had previously been approved by Congress. After revisions and approval by the Senate, both chambers must vote on the final version of the document. If the vote is successful, it’ll be sent to the president for signature.
In the text of the bill, a CBDC is defined as a digital asset denominated in U.S. dollars that represents a liability of the Federal Reserve and is available for mass use. Lawmakers propose introducing the corresponding provision into the Federal Reserve Act, establishing a direct ban on issuing such an instrument.
At the same time, the initiative allows for the possibility of issuing other forms of dollar-denominated digital assets that remain open and provide a level of user privacy comparable to that of U.S. cash.
Analysts previously noted that a digital dollar could pose a threat to the financial privacy of U.S. citizens. Many residents of the country expressed strong opposition to the technology.
The proposed provision is temporary. According to the document, the ban on issuing a CBDC will remain in effect until December 31, 2030, after which it’ll automatically expire unless Congress adopts a new resolution. U.S. officials have been actively trying to prevent the possibility of issuing a digital dollar in the country since 2023.
