A bipartisan iteration of the US housing bill retains a ban on central bank digital currency (CBDC) until 31 December 2030, and broad support from both chambers makes the wording likely to survive into the final law. Yesterday the Senate Banking Committee and House Financial Services Committee released the latest text of the 21st Century ROAD to Housing Act, with backing from the leading Republicans and Democrats on both committees.
The bill text defines a CBDC as US dollar denominated, a direct liability of the Federal Reserve System and widely available to the general public. It also allows for a notable exception, discussed below. The biggest concerns around retail CBDCs relate to privacy from government surveillance and the potential for governments to control public access to money. Those concerns do not apply to wholesale versions that are only available to financial institutions.
That means a wholesale CBDC or wholesale tokenized reserves would still be permissible. Several years ago the Fed explored the legal distinction between a wholesale CBDC, which is likely to be a separate legal liability of the Fed, and tokenized reserves. If tokenized reserves are simply current reserves available via a distributed ledger, then they represent the same legal liability. The point with tokenized reserves is that no permission is necessary.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
