The US Senate Committee on Banking has released an amendment that blocks the issuance of a CBDC by the Federal Reserve until the end of 2030. The document was prepared by Senators Tim Scott (Tim Scott) and Elizabeth Warren (Elizabeth Warren). The text has already been included for Senate consideration.
Nature of the Ban
Lawmakers have formally defined a central bank digital currency as a digital coin denominated in US dollars that represents the country’s official currency, serves as a direct liability of the Federal Reserve, and is available to the general public.
The amendment prohibits the Federal Reserve Board of Governors and any Federal Reserve Bank from issuing or creating such a currency. The ban applies both to direct issuance and to arrangements involving banks, financial institutions, or other intermediaries.
Exception
The document separately preserves the right for dollar-denominated digital currencies operating on an open, permissionless model to exist. Such systems must remain public and provide a level of privacy comparable to the use of physical cash — coins and banknotes.
Duration of the Ban
The provisions of the new section will automatically expire on December 31, 2030. Until that date, the Federal Reserve will be unable to launch a digital dollar or issue assets with a similar architecture.
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