Central Bank Digital Currencies: A Retail Ban, a Wholesale Question

Where retail CBDC policy stands in mid-2026

President Trump's January 23, 2025 executive order, "Strengthening American Leadership in Digital Financial Technology," directed every federal agency to stop work on a retail digital dollar and revoked the Biden administration's 2022 order that had made CBDC research a priority. An executive order is not permanent on its own; a future administration could reverse it by signing a new one. Congress spent the following eighteen months converting the policy into statute instead. The House passed a standalone version, the Anti-CBDC Surveillance State Act, 219-210 in July 2025. Its Senate companion stalled in committee into 2026, then was effectively overtaken: negotiators folded the same retail-CBDC prohibition into the 21st Century ROAD to Housing Act, a bipartisan housing-supply bill with no other connection to monetary policy. That combined bill passed the Senate 85-5 on June 22, 2026, and the House 358-32 the next day, and was transmitted to the President on June 29, 2026, starting the ten-day constitutional clock that runs out July 10, 2026. As of this writing the President has not signed it, having tied the signing to an unrelated proof-of-citizenship voting bill that already failed a separate Senate vote 48-50. Because both chambers passed the housing bill well past the two-thirds threshold needed to override a veto, and because an unsigned bill becomes law automatically if the President takes no action while Congress remains in session, the retail-CBDC ban is on track to take effect on schedule whether or not a signing ceremony ever happens. Newly confirmed Fed Chair Kevin Warsh removed any doubt about where the central bank itself stands: at his Senate confirmation hearing he said the Fed lacks legal authority to issue a CBDC and would not pursue one even if it had that authority.

None of this was a close call politically. On the specific question of whether an individual American should be able to hold a digital-dollar account directly at the Federal Reserve, the debate is over, and it ended in agreement.

What the ban exempts, and why that gap matters

The statutory language Congress passed does not ban "CBDC" as an undifferentiated category. It bars the Federal Reserve from issuing a digital asset that is widely available to the general public as a direct liability of the central bank, whether issued directly or through an intermediary, and it carves out dollar-denominated instruments that are open, permissionless, and privacy-preserving the way physical cash is, protecting private stablecoins from getting caught in the same net. Left alone by design is wholesale central-bank money: tokenized settlement instruments used bank-to-bank, with no individual account anywhere in the chain. Chair Warsh's own history illustrates the distinction better than any hypothetical could. He previously proposed a wholesale tokenized-dollar settlement system, and his confirmation-hearing rejection of "CBDC" did not walk that proposal back.

That distinction has stakes attached to it. The Federal Reserve Bank of New York already participates in Project Agorá, a Bank for International Settlements initiative with seven central banks exploring tokenized wholesale cross-border settlement. China's central bank has built and deployed a rival system, Project mBridge, alongside Thailand, the UAE, and Hong Kong; by late 2025 it was operating as a renminbi-denominated settlement rail for trade between China and Gulf states, run entirely outside the dollar-correspondent-banking system that has anchored dollar dominance in trade finance for decades. Whether the dollar keeps its central role in bank-to-bank cross-border settlement is a wholesale-infrastructure question, not a question about whether any American should be able to open a Fed account, and rhetoric that treats "CBDC" as one undifferentiated threat risks chilling the second kind of engagement along with the first, for no privacy benefit to anyone.

Trade-offs this position accepts

Codifying the retail ban permanently forecloses even a narrow, well-designed pilot of a Fed-direct account. That is a foreclosure, not a hedge: this position does not leave the door open to "see how a pilot goes." The financial-inclusion case for a retail CBDC is serious enough to earn its own treatment rather than a passing dismissal, and it gets one below. On the wholesale side, the trade-off runs the other way: continued participation in tokenized settlement research spends public money and Fed staff time on a technology whose retail form this same issue just argued should never reach consumers, an apparent tension resolved only by holding the retail/wholesale line consistently rather than letting either side's skepticism bleed into the other's domain.