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Bans the Federal Reserve, the Board, the Treasury Secretary, and other agencies or entities acting for them from issuing a U.S. central bank digital currency (CBDC) directly to individuals or certain intermediaries, from offering CBDC products or services to individuals, and from keeping accounts for individuals. It also prevents any Federal Reserve Bank from holding U.S.-issued digital currency on its balance sheet or using such digital currency to meet statutory requirements. The change amends the Federal Reserve Act to restrict central bank involvement in retail CBDC activity and balance-sheet holdings of U.S. digital currency, preserving the role of private financial intermediaries for consumer-facing accounts and preventing Federal Reserve banks from carrying U.S. digital currency as assets for regulatory or reserve purposes.
Prohibits any Federal Reserve bank, the Board, the Secretary of the Treasury, any other agency, or any entity directed to act on their behalf from minting or issuing a central bank digital currency directly to an individual. This includes CBDC issued to an individual through a custodial intermediary.
Prohibits the same set of entities from minting or issuing a CBDC directly to a digital currency intermediary.
Prohibits the same entities from offering CBDC-related products or services directly to an individual.
Prohibits the same entities from maintaining an account on behalf of an individual, including accounts in specially designated accounts at a digital currency intermediary or at a supervised commercial bank.
Prohibits any Federal Reserve bank from holding digital currencies minted or issued by the United States Government as assets or liabilities on the bank's balance sheet.
Who is affected and how:
Federal Reserve and Treasury operations: The Board, Reserve Banks, and Treasury would be legally barred from creating or operating a retail CBDC or offering consumer accounts, limiting the scope of any future federal digital-currency initiatives to non-retail (e.g., wholesale or interbank) uses or requiring private partners to carry out consumer-facing functions.
Individuals and consumers: People would be prevented from receiving CBDC directly from the Federal Reserve or Treasury; any CBDC-based consumer products would have to be offered through private financial intermediaries (banks, credit unions, payment firms) rather than directly by the central bank.
Banks and payment intermediaries: Private financial institutions would retain their central role as the points of contact for consumers and could continue to provide digital payment accounts and services; some firms might see this as protecting their business models, while others pushing for direct central bank access would be constrained.
Technology vendors and service providers: Firms that build CBDC systems would need to structure offerings for wholesale, interbank, or intermediary-facing deployments rather than direct-to-consumer central-bank-hosted wallets.
Monetary policy and financial stability: The ban reduces risks associated with rapid deposit migration to a central-bank-run retail account (a frequently cited stability concern), but it also shapes the design space for monetary policy tools that rely on direct retail transmission if policymakers intended such options.
Financial inclusion and innovation: Proponents of retail CBDC argue it could expand access and improve payment efficiency; this prohibition limits that pathway and preserves reliance on private-sector solutions. It may slow or redirect innovation toward private-sector wallets and stablecoins or toward CBDC models that serve only wholesale/interbank needs.
Net effect: The amendment is chiefly a legal restriction that narrows how a U.S. CBDC could be implemented by preventing direct federal retail engagement and Reserve Bank balance-sheet holdings of U.S. digital currencies. It protects the existing bank-intermediated payments model while constraining central-bank-led retail innovation and any designs that would place digital currency directly on Reserve Bank balance sheets.
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced February 6, 2025 by Mike Lee · Last progress February 6, 2025
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Saving Privacy Act
Saving Privacy Act
No CBDC Act
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Introduced in Senate
