The US Senate passed a major housing affordability bill by a vote of 85-5 on Tuesday, sending the legislation to the House of Representatives. The bill includes a provision that prohibits the Federal Reserve from issuing a central bank digital currency (CBDC) until 2030, effectively freezing any potential digital dollar initiative for the remainder of the decade.
CBDC, or central bank digital currency, is a digital form of fiat money issued by a central bank. While numerous countries around the world are actively researching or piloting CBDCs, concerns over privacy, financial stability, and government overreach have prompted some US lawmakers to push back against rapid adoption. The ban attached to the housing bill reflects this cautious approach, aiming to allow more time for deliberation and impact assessment.
The housing affordability package passed overwhelmingly with 85 votes in favor and only 5 against, indicating broad bipartisan support at least on the broader housing elements. However, the CBDC restriction may prove more contentious in the House, where similar measures have previously been debated. If it ultimately becomes law, the measure would represent a significant legislative barrier to the Federal Reserve's digital currency ambitions and could influence the global race for sovereign digital currencies.