Congress Shuts The Door On A Fed Digital Dollar For Now – And Opens One For Stablecoins

Treasury Secretary Scott Bessent and Federal Reserve Chair Kevin Warsh have recently voiced opposition to a US CBDC, helping build bipartisan momentum behind the proposal.

• The Senate passed H.R. 6644 by an 85-5 vote on Monday, including language prohibiting the Federal Reserve from issuing a CBDC.
• The provision bars the Fed from creating a CBDC through intermediaries but excludes open, permissionless, and private stablecoins.
• The measure revives key elements of Rep. Tom Emmer's Anti-CBDC Surveillance State Act, which previously stalled in the Senate.

The US Senate on Monday advanced a four-year ban on central bank digital currencies on a Federal Reserve central bank digital currency by a vote of 85-5, tucked inside a sweeping housing bill. The bill could be fast-tracked as early as Tuesday for a final vote to be reached, upon which it would automatically move for President Trump’s signature.

The bill language prohibits the Fed from “issu[ing] or creat[ing], directly or indirectly, a CBDC. The provision includes an exemption for “open, permissionless, and private” stablecoins. 

The anti-CBDC language resurrects key provisions of Rep. Tom Emmer’s Anti-CBDC Surveillance State Act, a proposal that had previously stalled in the Senate after passing the House.

Monday’s vote was the third major congressional vote on the same package. The Senate first passed the package 89-10 in March, and the House amended it and passed it 396-13 in May. 

Housing Bill As Legislative Vehicle

The CBDC language was tucked into the broader housing package, which Senate Banking Committee Chairman Tim Scott (R-S.C.) called the biggest push for bipartisan housing reform in decades. The legislation primarily focuses on increasing housing supply, reducing regulatory burdens, lowering costs for families, and incentivizing private-sector investment in housing. 

Key provisions include streamlining environmental reviews, modernizing manufactured housing rules, updating multifamily financing tools, and limiting certain large institutional investors from crowding out families in residential markets, according to the Senate Banking Committee.

The legislation also arrives amid growing opposition to a US CBDC among senior policymakers. Treasury Secretary Scott Bessent has said a US central bank digital currency is "off the table."

New Federal Reserve Chair Kevin Warsh has opposed a US CBDC for years, calling the concept "a bad policy choice" during his Senate confirmation hearing and arguing the Fed "does not have the right" to issue one. His longstanding position has been a consistent thread in his case for keeping the dollar's digital evolution in private hands rather than state-issued ones.

What It Means For Stablecoins

The CBDC carve-out removes a potential Fed-backed competitor from the dollar-digital-payments landscape for at least four years and preserves the market position of private stablecoin issuers, including Circle Internet Group (CRCL), which produces USDC, the largest dollar-backed stablecoin, and Tether (USDT).

It also comes as the broader U.S. stablecoin regulatory framework, the GENIUS Act, which was signed into law in July, is already being implemented, with rules being written. The two measures together codify a US policy position favoring private dollar-digital innovation over a state-issued alternative.

CRCL stock was down over 4% during pre-market trade. On Stocktwits, the retail sentiment around CRCL remained in the ‘bearish’ zone, while chatter around it stayed at ‘normal’ levels over the past day.

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