Odaily Planet Daily reports that investment bank TD Cowen says the U.S. Congress may be nearing passage of legislation to permanently prohibit the Federal Reserve from issuing a central bank digital currency (CBDC). This move could benefit stablecoin issuers but may also introduce new complexities to the legislative framework for the cryptocurrency market.
Last week, U.S. Senator Ted Cruz proposed an amendment to the housing bill, the 21st Century ROAD to Housing Act, requiring a permanent ban on the Federal Reserve issuing a CBDC. The amendment aims to convert the current temporary ban, set to expire in 2030, into a permanent provision. The housing bill is expected to be submitted for a Senate vote as early as this week.
Jaret Seiberg, Managing Director of the Washington Research Department at TD Cowen, said that the housing bill expected to be submitted to the president for signature likely includes this ban, with a permanent ban being more probable than a temporary one.
Seiberg noted that the amendment essentially reinforces the current policy stance. The Federal Reserve has previously stated multiple times that it will not issue a digital dollar without explicit authorization from Congress.
Meanwhile, several U.S. lawmakers have recently signed a letter to congressional leadership urging a permanent ban on CBDCs. Representative Ralph Norman stated that, unlike cash, CBDCs could enable the government to track transactions and monitor individuals’ spending behavior, and therefore require a permanent ban to protect Americans’ privacy and freedom.
Notably, the U.S. House of Representatives passed the Anti-CBDC Surveillance State Act last year, prohibiting the Federal Reserve from issuing a CBDC directly to individuals. Cruz has also consistently advocated for the Senate to pass similar legislation.