Congress bars Fed retail CBDC through 2030

Congress voted to bar the Federal Reserve from offering a retail central bank digital currency to the general public through the end of 2030. The restriction was included in the 21st Century ROAD to Housing Act, which passed the Senate 85-5 on June 22 and the House 358-32 the following day. President Trump delayed a related signing ceremony tied to a separate voting bill, and congressional leaders expect the housing bill to be signed soon.

The provision prevents the Fed from providing digital dollar accounts directly to consumers before 2031 without new congressional authorization. A retail CBDC would have been a government-issued digital dollar that is a direct liability of the Fed and usable on a phone. The Fed’s work to date has consisted mainly of research and a small Boston Fed pilot, not a deployable product. Fed Chair Kevin Warsh described a U.S. retail CBDC as a “bad policy choice” during his confirmation hearing, and Treasury Secretary Scott Bessent told officials a digital dollar was “off the table” earlier this year.

Private stablecoin issuers gained a clearer regulatory path from the ban and an explicit exemption in the housing bill. Stablecoins are digital tokens that aim to maintain a one-to-one peg to the dollar and are backed by cash and short-term Treasury bills. Circle’s USDC and Tether’s USDT together hold more than 80% of a market now worth about $320 billion. Last year’s GENIUS Act set federal rules for stablecoins requiring one-to-one reserves, monthly disclosures and a ban on paying interest directly to token holders.

Large banks are building an alternative digital-dollar option. JPMorgan, Citigroup, Bank of America, Wells Fargo and other lenders are developing a shared network of tokenized deposits through The Clearing House, with a target launch in the first half of 2027. Tokenized deposits would record ordinary bank balances on a digital ledger while keeping those balances as bank liabilities eligible for FDIC protection. The banks’ design aims for instant, round-the-clock settlement and programmable payments while preserving deposit protections and regulatory oversight.

Regulatory texts have carved out room for tokenized deposits. The GENIUS Act excludes deposits recorded on a digital ledger from its definition of a payment stablecoin. The FDIC clarified that stablecoin reserve holdings would not pass FDIC insurance through to token holders, while tokenized deposits would retain ordinary deposit insurance. U.S. banking groups warned Congress that poorly designed rules could shift up to $6.6 trillion out of traditional deposits and reduce lending capacity. JPMorgan’s CEO has opposed allowing stablecoin platforms to pay returns that resemble deposit yield.

Officials and industry observers disagree on which private option will prevail. A Bank of England official argued tokenized deposits could supplant stablecoins within five years. A Federal Reserve governor defended stablecoins as healthy payment competition. Bank executives say the bank network has work to do: they have not selected a blockchain vendor, corporate demand remains limited, and initial use cases are expected to focus on large multinational treasury and cross-border payments. That schedule leaves time for stablecoin firms to expand merchant acceptance, fintech integrations and payroll use before tokenized deposits reach broad retail scale.

The new law removes the federal government’s near-term option to issue a retail CBDC. Regulators are continuing to draft rules that will determine how private digital dollars operate, including limits on returns, supervision levels and the choice between open public networks and closed bank systems.