US Congress Bans Federal CBDC Until 2030 in Housing Bill
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
cbdcus-congress
Fazen Markets Editorial Desk
Collective editorial team · methodology
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The US Congress passed the Affordable Housing and Community Reinvestment Act on June 24, 2026, sending the legislation to the President's desk for final approval. The primary focus of the bill is to increase housing supply and affordability through zoning reforms and tax credits. Embedded within the bill's text is a provision that explicitly prohibits the Federal Reserve from issuing a central bank digital currency (CBDC) or any digital dollar equivalent for use by individuals until at least December 31, 2030. The Block first reported the inclusion of the anti-CBDC language, which represents a significant legislative intervention into US monetary policy innovation.
The legislative action arrives amid heightened global experimentation with CBDCs, with over 130 countries currently exploring digital versions of their currencies according to the Atlantic Council. The political debate over a digital dollar has intensified since the Federal Reserve's 2022 discussion paper, "Money and Payments: The U.S. Dollar in the Age of Digital Transformation." The catalyst for the legislative ban is a compromise to secure bipartisan support for the housing provisions, appealing to lawmakers concerned about government overreach and financial privacy. This mirrors historical legislative tactics, such as the 2010 Dodd-Frank Act's Durbin Amendment, which attached debit card interchange fee caps to the broader financial reform bill.
Opposition to a US CBDC has become a central issue for segments of both political parties. Privacy advocates warn of potential government surveillance of citizen transactions, while some banking industry groups argue a retail CBDC could disintermediate commercial banks. The current macro backdrop of elevated interest rates and a strong US dollar has reduced the perceived urgency for a digital dollar as a tool for monetary sovereignty. The ban effectively pauses the debate for nearly six years, pushing any potential launch beyond two presidential election cycles.
The legislation imposes a formal moratorium lasting 1,660 days from the expected date of enactment. The bill allocates $25 billion in new grants and tax incentives for affordable housing construction. This housing-focused funding is more than 500 times the Fed's annual research budget for digital currency projects, which was approximately $45 million in the 2025 fiscal year.
| Metric | Before Bill Passage | After Bill Passage |
|---|---|---|
| Fed's CBDC Authority | Research & Development Only | Explicitly Banned for Retail Use |
| Legislative Timeline | No Restriction | Banned Until Dec 31, 2030 |
| Key Housing Allocation | N/A | $25 Billion |
The prohibition applies specifically to a retail CBDC accessible by individuals, leaving room for continued research into wholesale CBDCs for interbank settlements. This distinction is critical, as wholesale CBDC projects like the Federal Reserve Bank of New York's Project Cedar have focused solely on institutional transactions. The US position now contrasts sharply with China's digital yuan, which has been piloted in transactions exceeding 1.8 trillion yuan ($250 billion) as of late 2025.
The ban is a net positive for traditional financial intermediaries. Major custody banks and payment processors like JPMorgan Chase (JPM) and Bank of New York Mellon (BK) avoid a potential long-term competitor for retail payment services. Private sector digital dollar projects, including stablecoin issuers like Circle (USDC) and Tether (USDT), benefit from the removal of a government-backed alternative for at least five years. The clearest second-order effect is a tailwind for private payment networks; Visa (V) and Mastercard (MA) see reduced regulatory risk to their business models.
A counter-argument exists that the ban could hinder US leadership in the future global financial system, potentially ceding innovation to other jurisdictions. The limitation of the bill is that it does not address cross-border payments, an area where a US CBDC could have enhanced dollar dominance. Market positioning suggests institutional capital will continue flowing into blockchain infrastructure firms focused on private settlement layers rather than those building for potential public sector digital currency integration. Trading flows indicate a slight bullish bias for fintech ETFs like FINX versus broader financials.
The immediate catalyst is President Trump's decision on the bill, expected before the July 4 recess. A signing would lock in the policy, while a veto would send it back to Congress. Markets will monitor the Fed's July 31 policy statement for any altered language regarding digital currency research in response to the legislation.
Key levels to watch include the USD Coin (USDC) market cap, currently at $33 billion, as a barometer for stablecoin demand in the absence of a Fed digital dollar. The SEC's final rulemaking on digital asset custody, due by Q1 2027, will now unfold without the complicating factor of an imminent CBDC. The next major legislative milestone will be the 2030 debate on whether to extend the ban, which will begin in the 2031 congressional session.
The legislation reinforces the competitive landscape for cryptocurrencies as non-sovereign monetary networks. By restricting the development of a federally-controlled digital dollar, the bill maintains a market niche for decentralized assets like BTC and ETH. This could foster increased institutional adoption of crypto as a settlement layer and store of value, distinct from government-issued digital money. The ban does not directly regulate cryptocurrencies, leaving their legal status unchanged under existing securities and commodities frameworks.
The US moratorium creates a stark contrast with the European Central Bank's digital euro project, which is in its preparation phase with a potential launch around 2028. The ECB is proceeding with a privacy-focused design that processes transactions offline. This transatlantic divergence may lead to regulatory fragmentation in global digital payment standards, forcing multinational corporations to operate across different digital currency regimes. The EU's approach emphasizes consumer choice, while the US ban reflects deeper political skepticism.
Yes, the legislation's prohibition specifically targets a "retail" or "general purpose" CBDC accessible by the public. The Federal Reserve retains authority to continue research and potential pilot programs for a wholesale CBDC used for interbank settlements and securities transactions. Projects like the New York Fed's innovation center work with major banks on multi-asset platforms that could utilize a wholesale digital dollar without violating the ban.
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