Sponsors (3)
The bill preserves household privacy and private-sector control over retail payments by blocking the Fed from issuing digital accounts to individuals, but it reduces policymakers' ability to make fast, direct government payments and may slow or complicate adoption of a government-backed digital payment system and future monetary tools.
Households (including low-income individuals) keep greater privacy and personal choice because the Federal Reserve is barred from directly issuing digital wallets or accounts to individuals.
Commercial banks and digital payment firms retain their primary role as providers of retail payment services, preserving private-sector control and existing payment relationships.
Taxpayers and low-income individuals could lose access to faster, cheaper government benefit deliveries and emergency disbursements because the Fed is prevented from sending funds directly to individuals.
Taxpayers and low-income individuals may face slower or more expensive payment innovation because the ban could delay adoption of a secure, government-backed digital payment infrastructure that might reduce private-sector fees.
Financial institutions and the public could face complications for future monetary policy design because the restriction limits the Federal Reserve's balance-sheet tools if Congress later authorizes a central bank digital currency (CBDC).
Based on analysis of 2 sections of legislative text.
Statutorily prohibits the Federal Reserve, Treasury, and related entities from issuing or servicing a retail CBDC, maintaining individual accounts, or holding government-minted digital currency.
Official title: Amend the Federal Reserve Act to limit the ability of Federal Reserve banks to issue central bank digital currency.
Introduced February 6, 2025 by Mike Lee · Last progress February 6, 2025
Prohibits the Federal Reserve, the Board of Governors, the Treasury, and any entity acting for them from minting or issuing a retail central bank digital currency (CBDC) directly to individuals or to digital currency intermediaries. It also bars those agencies from offering CBDC-related products or services to individuals, maintaining accounts for individuals (including through custodial intermediaries), and holding or using government-minted digital currencies on Reserve bank balance sheets or to meet statutory reserve or requirement obligations. The bill adds an express prohibition into the Federal Reserve Act, narrowing Federal Reserve authority by forbidding direct issuance to or servicing of individual users and by preventing the Fed from holding government-minted digital currency as assets or to satisfy legal requirements. It does not address private-sector stablecoins or broader digital-asset regulation beyond these specific prohibitions.