Sponsors (3)
The bill preserves individual privacy and the role of private banks by banning a Fed-issued retail CBDC, but at the cost of foregoing potential gains in financial inclusion, payments innovation, and a new monetary/emergency tool.
All Americans keep protection from a Fed-operated retail CBDC: the bill prevents the Federal Reserve from issuing digital wallets or direct accounts to individuals, preserving the current bank-mediated payments model and reducing the risk of direct government access to individual transaction data.
Commercial banks and private digital payment intermediaries remain primary on-ramps for digital payments, avoiding disintermediation of private banks and supporting existing financial-sector business models.
Unbanked and underbanked individuals lose a potential pathway to direct Fed-provided accounts, limiting a possible route to expand financial inclusion and access to basic payment services.
The restriction on Federal Reserve-led CBDC activity could slow payments-system modernization and efficiency gains, and it may create legal/regulatory uncertainty that complicates public–private pilots and industry planning.
Prohibiting retail Fed accounts limits a potential tool for monetary policy or emergency response that might rely on Fed-held balances or accounts, reducing government flexibility in crises.
Based on analysis of 2 sections of legislative text.
Prohibits the Federal Reserve, the Treasury, and entities acting on their behalf from issuing or distributing a retail central bank digital currency (CBDC) directly to individuals or to digital-currency intermediaries, from offering CBDC-related products or services to individuals, and from maintaining accounts for individuals. It also bars Federal Reserve Banks from holding government-issued digital currencies on their balance sheets or using those digital currencies to meet statutory reserve/account requirements. The Act also establishes an official short title for citation.
Introduced February 6, 2025 by Mike Lee · Last progress February 6, 2025