Leaders of the Senate Finance and Senate Financial Services committees announced a bicameral agreement on the 21st Century “Pathway to Housing” Act that includes a provision prohibiting the Federal Reserve from issuing a central bank digital currency (CBDC) until at least 2030.
This restriction widens the political gap between Washington and the European Central Bank, which is actively working to build a digital euro.
Has the US banned central bank currencies (CBDCs)?
US lawmakers have agreed to prevent the Federal Reserve from creating a central bank digital currency (CBDC) or anything similar to a currency, either directly or through financial intermediaries, as part of a larger housing bill called the “Housing Bill.” The 21st Century Road to Housing Law. The restriction will continue until December 31, 2030.
Lawmakers added the ban on central bank digital currencies to the housing bill after the Senate passed its version in March, and the House passed its version in May. Senate Banking Chairman Tim Scott negotiated with Ranking Member Elizabeth Warren and coordinated with House Financial Services members on both sides of the aisle before reaching this new agreement.
If the bill is passed in its current form, along with the ban on central bank digital currencies (CBDC), several housing provisions would go into effect, such as prohibiting large institutional investors from purchasing single-family homes, brokerage deposit rules, and the formation of neobanks.
President Donald Trump He issued an executive order In January 2025, he instructed federal agencies to stop working with government-controlled digital money.
The White House said central bank digital currencies threaten “the stability of the financial system, individual privacy, and the sovereignty of the United States.” The order also states that the United States should focus on supporting dollar-backed stablecoins instead.
Rep. Tom Emmer (R-Minn.). I paid for the banHe said that central bank digital currencies stand against privacy, freedom and free market competition. He called it a “weaponized surveillance tool” that should never be adopted. Some privacy advocates in Congress have even pushed for a permanent ban.
The ban also removes the government as a competitor to companies like Circle (USDC) and Tether (USDT). The Senate is expected to take a procedural vote this week, and a vote in the House of Representatives is scheduled after June 23.
What does Europe do differently from the United States?
Unlike the United States, the European Central Bank is pressing ahead with its plans to create a digital euro and sees it as a way to protect Europe’s monetary independence.
The timeline for a digital euro depends on lawmakers passing the necessary laws. If the legislation is passed in 2026, a pilot program could begin in 2027, and the first digital euro could be issued in 2029.
The European Central Bank is working to make the digital euro easier to use for everyone, including people with disabilities. They have signed agreements with organizations to test accessibility features such as voice commands and large texts.
ECB officials are concerned about the dominance of dollar-backed stablecoins, as almost all currencies in circulation are linked to the dollar, giving the United States greater influence over global payments. Cryptopolitan I mentioned previously Dollar-denominated stablecoins have a combined market capitalization of about $317 billion, while euro-denominated stablecoins represent less than $1 billion.
A digital euro would give European payment companies a way to compete with major international card schemes such as Visa and MasterCard. The European Central Bank is working to establish open standards that European companies can use to build their own payment services.
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