Congress blocks Fed from issuing digital currency, preserving bank gatekeepers
S. 1124 — Anti-CBDC Surveillance State Act · Filed by Ted Cruz (R-TX) · 8 cosponsors · Introduced Mar 25, 2025 · Referred to committee
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What it does
This bill prohibits the Federal Reserve from issuing a central bank digital currency (CBDC) directly or indirectly to individuals, from maintaining individual accounts, and from using any digital asset substantially similar to a CBDC for monetary policy. It also expresses Congress's view that the Fed lacks authority to create a CBDC without explicit congressional approval.
Why we flagged it
The bill's core mechanism is a direct statutory prohibition on Federal Reserve digital currency issuance and testing, framed explicitly as a surveillance-prevention measure. The operative text is straightforward: the Fed is barred from certain activities, not empowered to do anything new.
What the text implies
- Prohibition on Fed testing or studying CBDCs may prevent the U.S. from developing technical expertise in digital currency design, potentially ceding innovation leadership to other central banks and private cryptocurrency platforms.
- The bill's broad definition of 'substantially similar' digital assets may inadvertently restrict the Fed's ability to modernize payment infrastructure or participate in cross-border digital settlement systems that do not meet the CBDC definition but serve similar functions.
The full analysis lists 4 implications of this text.
Who stands to gain
commercial banks (preserved deposit-taking monopoly and intermediary role); insurance companies (regulatory exposure mapped; potential beneficiaries if CBDC would have disrupte