Congress Blocks Fed Retail CBDC Through 2030

Congress inserted a four-year ban on a Federal Reserve retail central bank digital currency into the 21st Century ROAD to Housing Act. The provision passed the Senate 85-5 on June 22 and the House 358-32 the next day, and it prevents the Fed from offering a CBDC to the general public until at least 2031 without new congressional authorization.

Supporters of a U.S. CBDC have argued it could speed payments and expand access to public money. Opponents warned of potential government oversight of transactions and of deposit outflows from banks. At his confirmation hearing, Fed Chair Kevin Warsh described a retail CBDC as “a bad policy choice.” Treasury Secretary Scott Bessent called a digital dollar “off the table.” President Trump postponed a planned signing ceremony while linking approval of the package to a separate voting bill; House leaders expect the housing bill to be signed in the coming days.

The housing bill also preserves legal space for private stablecoins. The GENIUS Act, enacted last year, requires stablecoin issuers to hold one-to-one reserves, deliver monthly disclosures and bars paying interest to token holders. Circle’s USDC and Tether’s USDT account for more than 80% of a stablecoin market valued at about $320 billion. The housing bill explicitly exempts open private dollar tokens from the CBDC prohibition.

Federal agencies had not developed a production-ready retail CBDC. Public steps by the Fed included research papers and a small pilot at the Boston Fed, but no nationwide system was deployed. The new law therefore bars a project that had not reached implementation and leaves the practical competition over digital dollars to private firms and banks.

Major U.S. banks are building an alternative called tokenized deposits. JPMorgan, Citigroup, Bank of America, Wells Fargo and other lenders are developing a shared blockchain-based network through The Clearing House, targeting a launch in the first half of 2027. Tokenized deposits are ordinary bank deposits recorded on a distributed ledger; the funds remain bank liabilities, keep FDIC insurance, and gain instant settlement, 24/7 availability and programmable features.

Regulatory language in the GENIUS Act excludes deposits recorded on a digital ledger from the definition of a payment stablecoin. In April the FDIC clarified that reserve assets backing stablecoins would not carry pass-through deposit insurance for token holders, while tokenized deposits would retain ordinary deposit protections. Banking groups have told lawmakers that large shifts of deposits into unbanked stablecoins could reduce funding available for lending, and officials warned that poorly designed rules could move substantial sums out of the traditional deposit system.

Questions remain about adoption and timing. A bank executive reported that client demand for tokenized deposits is not yet strong, and the bank network has not selected a blockchain vendor. Early use cases for tokenized deposits are expected to focus on corporate treasury and cross-border settlement, which could keep stablecoins more prominent in consumer-facing and open-market niches in the near term. Regulators’ choices on access, supervision and limits on yield will affect which products gain broader consumer and merchant use.

The housing bill settles federal policy on a retail CBDC through 2030. Which private architecture becomes the most used digital dollar will depend on product rollouts by banks, ongoing growth and compliance by stablecoin issuers, and the supervisory decisions regulators make in the coming years.