US Senate passes housing bill carrying a four-year ban on a Fed digital dollar

The US Senate has passed a sweeping bipartisan housing bill that, tucked into its final pages, would bar the Federal Reserve from issuing a central bank digital currency for four years, an unusual pairing that pulls digital-money policy into a debate otherwise focused on housing affordability. The measure cleared the chamber by a wide 85-5 margin on Monday night.

The legislation, known as the 21st Century ROAD to Housing Act, is primarily aimed at expanding housing supply and curbing the dominance of large investment firms in the residential market. But it also contains a provision prohibiting the Fed, or any reserve bank, from issuing or creating a central bank digital currency, or any digital asset substantially similar to one, directly or through an intermediary, with the ban running through the end of 2030. The restriction notably carves out privately issued stablecoins, exempting open, permissionless and private dollar-denominated currencies.

The provision is striking given that the Fed has never moved beyond the research stage on a digital dollar. The idea of a CBDC, a government-issued digital form of money managed by the central bank, has become a flashpoint for Republican lawmakers, who argue it could erode financial privacy and hand the government a surveillance tool over how citizens spend. President Donald Trump signed an executive order in early 2025 barring his administration from pursuing one, and the current Fed chair has voiced firm opposition to following the path taken by China and others.

With neither the White House, Congress nor the central bank pushing to build a CBDC, the practical effect of the ban is largely pre-emptive. Republicans, keen to lock in the prohibition, attached it to the must-pass housing package, a common legislative tactic for advancing standalone priorities. Even after 2030, the language would require explicit congressional authorization before the Fed could act, raising the bar for any future digital dollar.

The bill now heads to the House of Representatives, which was expected to take it up on an accelerated timeline as lawmakers returned from recess. If the House follows the Senate's lead, the package would go to the president for his signature, making the CBDC restriction law. Some House conservatives have grumbled that the four-year window does not go far enough, preferring a permanent ban, which could complicate the path even amid broad support.

On the housing side, the bill responds to an affordability crunch that has pushed homeownership out of reach for many, with median prices far outpacing incomes and the typical first-time buyer now markedly older than in years past. It streamlines environmental reviews for new construction, adjusts rules on bank investment in affordable housing and sets up programs to convert vacant buildings into homes, drawing support from a broad coalition of industry groups.

The episode highlights how digital-asset policy has become entangled with mainstream legislation. While the US moves to fence off a state-issued digital dollar, other jurisdictions are pressing ahead, with the European Central Bank advancing its own digital euro and a handful of countries having already launched CBDCs, underscoring the divergent paths major economies are taking on the future of money.