Sponsors (3)
The bill prevents a retail CBDC to protect consumer privacy, bank intermediation, and Fed balance-sheet exposure, but at the cost of foregoing potential lower-cost/faster payments, faster crisis transfer tools, and some digital-payments innovation.
Middle-class families and taxpayers will continue to rely on private bank accounts and third-party payment providers because the Fed and Treasury are barred from directly issuing a retail CBDC to individuals, preserving bank-intermediated payments.
Individuals (middle-class families and taxpayers) will face lower risk of government-held personal accounts and related financial surveillance because the Fed and Treasury are prohibited from maintaining accounts on behalf of people.
Financial institutions and taxpayers will face reduced Federal Reserve balance-sheet exposure because the Fed is forbidden from holding U.S.-minted digital currency as assets or liabilities, potentially lowering operational/accounting complexity and fiscal risk.
Consumers and small businesses will be prevented from accessing potential cost savings and faster payments that a government-issued retail CBDC could have delivered.
Low-income households and other recipients of emergency aid could lose access to a rapid, direct transfer tool in crises because a CBDC delivery channel would be constrained.
Fintech companies, tech workers, and financial institutions will see slower innovation and fewer opportunities for public–private experimentation in digital payments tied to a public CBDC.
Based on analysis of 2 sections of legislative text.
Prohibits the Federal Reserve, Treasury, and their agents from issuing, offering, holding, or maintaining accounts for a U.S. central bank digital currency for individuals or intermediaries.
Introduced February 6, 2025 by Mike Lee · Last progress February 6, 2025
Prohibits the Federal Reserve, the Treasury, and entities acting on their behalf from creating, issuing, offering, holding, or maintaining accounts for a U.S. central bank digital currency (CBDC) for individuals or for digital currency intermediaries. It also stops Federal Reserve banks from carrying U.S.-minted digital currencies on their balance sheets or using them to meet certain reserve or regulatory requirements.