"Congress Embeds CBDC Ban in Defense Bill to Sidestep Senate Resistance"

The U.S. House of Representatives has embedded a provision banning the Federal Reserve from issuing a central bank digital currency (CBDC) into the National Defense Authorization Act (NDAA) for the 2026 fiscal year. The inclusion appears in a revised version of HR 3838, which was shared by the House Rules Committee. The provision explicitly prohibits the Federal Reserve from testing, studying, developing, creating, or implementing a CBDC, while allowing a specific exemption for stablecoins that are described as "open, permissionless, and private." The move comes amid ongoing debates over privacy concerns and government oversight in the evolving digital asset landscape.

This CBDC restriction is part of a larger 1,300-page defense policy bill and aligns with a broader effort by Republican lawmakers, who have previously passed a standalone CBDC ban, the Anti-CBDC Surveillance State Act, in July by a narrow vote of 219 to 210. However, the standalone measure faces an uncertain path in the Senate. The inclusion of the CBDC ban within the NDAA is a strategic move, as such legislation is typically prioritized and passed without major obstruction, allowing non-defense-related provisions to gain traction more easily. House leaders, including Majority Leader Steve Scalise, had earlier committed to attaching the CBDC ban to the NDAA in a compromise with conservative hardliners, which delayed floor debate for over nine hours in July—marking the longest delay in House history.

The provision explicitly bars the Federal Reserve from offering any financial products or services directly to individuals, further narrowing the central bank’s role in the digital currency ecosystem. This aligns with broader political concerns over surveillance and individual privacy, particularly in light of the U.S. government’s increasing regulatory scrutiny of digital assets. The measure also echoes President Donald Trump’s January executive order, which similarly prohibits the development of CBDCs, signaling a consistent stance among certain political factions in the U.S.

This is not the first attempt to restrict CBDCs in the U.S. Congress. A similar bill, the CBDC Anti-Surveillance State Act, introduced by Representative Tom Emmer in 2023, failed to progress and expired with the previous Congress. Emmer has since reintroduced the measure in the current session, gaining support from fellow Republicans who see it as part of a larger regulatory strategy to preserve privacy and limit government overreach. The provision included in the NDAA reflects a continuation of this effort, despite the Federal Reserve’s own exploratory work on CBDCs, which has been ongoing for several years.

The immediate market impact of the CBDC ban has been neutral, as major cryptocurrencies such as Bitcoin and Ethereum have not shown significant price fluctuations in response. However, the legislative move highlights the growing divide in global CBDC strategies. While the U.S. moves toward restricting such digital currencies, other nations, including China, are actively developing their own CBDC frameworks. This divergence underscores broader geopolitical and economic discussions around digital sovereignty and privacy in the future of finance.

Source: [1] US House adds CBDC ban to massive defense policy bill (https://cointelegraph.com/news/us-house-adds-cbdc-ban-defense-policy-bill) [2] U.S. House Includes Anti-CBDC Measure in Defense ... (https://intellectia.ai/news/crypto/us-house-adds-anticbdc-provision-to-defense-bill) [3] Crypto Week Was More than the GENIUS Act (https://www.law.com/newyorklawjournal/2025/08/20/crypto-week-was-more-than-the-genius-act-what-the-clarity-act-and-anti-cbdc-surveillance-state-act-mean-for-the-future-of-digital-assets/)