Primary federal effect: The Board of Governors of the Federal Reserve System and the Federal Reserve Banks lose the statutory ability to create, issue, or operate a retail central bank digital currency (CBDC) or materially similar digital asset, and are barred from opening or maintaining accounts for individuals. This legally constrains the Fed’s toolkit for retail payments and any potential future design for Fed‑managed digital money.

Banks and financial institutions: Commercial banks and other financial intermediaries cannot be used by the Fed to deliver a Fed‑issued CBDC to individuals, which limits projects that would have positioned banks as distribution channels for a Fed digital currency. Existing banking operations (e.g., deposit taking, interbank accounts) remain governed by current law; the bill focuses on new Fed retail services.

Consumers and households: Individuals would be explicitly excluded from holding accounts or Fed‑issued digital currency directly, preserving the status quo of holding deposits at private banks rather than at the central bank. That outcome affects debates about privacy, access, and payment costs — for example, it prevents a Fed solution that might provide universal digital wallets or direct Fed deposits to consumers.

Private crypto and payments industry: The prohibition blocks a Fed‑issued retail CBDC, which may steer innovation and investment toward private sector solutions (stablecoins, tokenized dollars, or payment rails). The limited statutory exception for open, permissionless, privacy‑preserving private dollar‑denominated monies could encourage certain designs, but regulatory treatment of private stablecoins otherwise remains subject to existing securities, banking, and payments law.

Monetary policy and financial stability tools: By removing the statutory option of a Fed retail CBDC, the bill constrains one potential tool for monetary distribution, financial inclusion, or crisis responses that some policymakers have proposed. It may also limit how the Fed could respond to bank runs or provide direct liquidity to households via central‑bank accounts.

Legal and constitutional posture: The bill explicitly states Congress — not the Fed — must grant authority to issue a CBDC, underscoring separation of powers and establishing a clear legislative prerequisite for any future Fed action. That statement also sets up potential legal arguments if the Fed pursued CBDC experiments or related activities absent new congressional authorization.

Operational and regulatory gaps: The legislation does not specify supervisory, compliance, or transitional rules for private providers or for existing Fed experiments; absence of an effective date or implementing guidance means practical questions about enforcement and permitted private innovations would be resolved later by regulators, courts, or subsequent legislation.