Congress proposes dismantling the Federal Reserve entirely

What it does

This bill would abolish the Federal Reserve Board and all 12 Federal Reserve Banks within one year of enactment, liquidate their assets, transfer proceeds to the U.S. Treasury, and assume all Fed liabilities (including employee pensions and outstanding obligations) under the Treasury Department. The Secretary of the Treasury would oversee the wind-down and asset sale.

Why we flagged it

The bill's stated mechanism is straightforward: it directly abolishes the Federal Reserve and repeals the Federal Reserve Act. However, the functional consequence is the elimination of the entire U.S. monetary policy apparatus, which is a radical restructuring of the financial system, not a routine legislative adjustment.

What the text implies

• Abolishing the Fed removes the lender of last resort function, eliminating the institution's ability to prevent or manage banking panics and financial crises, potentially triggering systemic collapse.
• The bill does not specify what institution (if any) would conduct open-market operations, set interest rates, or manage the money supply after abolition, creating a vacuum in monetary policy authority.
• Liquidating Fed assets (primarily U.S. Treasury securities and mortgage-backed securities) in an 'orderly manner' during a 1-year wind-down could flood markets with sales, depressing asset prices and destabilizing bond markets.
• The bill transfers all Fed liabilities to the Treasury but does not clarify how the Treasury would fund ongoing obligations (e.g., currency in circulation, interbank settlement systems) without a central bank.
• Elimination of the Fed's regulatory authority over member banks and payment systems would leave no federal supervisor for systemically important financial institutions, increasing moral hazard and systemic risk.

Who it affects

Eliminating the Federal Reserve would remove the primary institution responsible for managing monetary policy, controlling inflation, and stabilizing financial markets and the banking system. Citizens depend on Fed functions for price stability, employment support, and financial system safety; abolition would create severe economic disruption, likely triggering financial instability, uncontrolled inflation or deflation, and banking crises that harm ordinary households through job loss, savings e

Who stands to gain

• Cryptocurrency and alternative currency advocates (removal of Fed monetary control)
• Unregulated financial institutions (loss of Fed supervision)
• Certain hedge funds and speculators (potential market volatility from asset liquidation)

Named in the bill

Federal Reserve Board, Federal Reserve Banks (12 regional banks), Board of Governors, Secretary of the Treasury, Office of Management and Budget, U.S. Treasury Department, Federal Reserve Act

Where it stands

11 cosponsors: 11 Republicans.

• Mar 5, 2025 — Introduced · Congress.gov: “Introduced in House”
• Mar 5, 2025 — Referred to House Committee on Financial Services · Congress.gov: “Referred to the House Committee on Financial Services”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.