The US Congress approved a ban on the Federal Reserve's ability to create a digital currency by embedding this measure into the annual defense bill.
CBDC Ban in Defense Bill
The US House of Representatives voted to block the Federal Reserve from issuing a digital currency as part of the National Defense Authorization Act for the fiscal year 2026. The revised HR 3838 explicitly prohibits the Fed from studying, testing, or creating a digital currency.
Republican Promises on CBDC
House Republican leaders pledged to include a CBDC ban in the defense bill as part of negotiations with conservative holdouts. This resulted in a temporary halt to discussions on three separate crypto bills for more than nine hours.
New Restrictions for Federal Reserve
Under the defense bill’s new language, the Federal Reserve is barred from directly offering digital assets or financial services to individuals. However, it clarifies that this does not prohibit the private sector from developing stablecoins, allowing the use of 'any dollar-denominated currency that is open, permissionless, and private.'
The CBDC ban underscores deep partisan divides over the future of digital money in the US. With Senate approval uncertain, this provision may become a focal point in broader negotiations over defense funding.
