Congress blocks the Fed from issuing digital dollars—forever.
S. 464 — No CBDC Act · Filed by Mike Lee (R-UT) · 2 cosponsors · Introduced Feb 6, 2025 · Referred to committee
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What it does
This bill amends the Federal Reserve Act to prohibit the Federal Reserve, the Treasury Department, and any other federal agency from issuing, minting, or offering central bank digital currency (CBDC) directly to individuals or through intermediaries, and bars the Federal Reserve from holding such currencies as assets. It effectively blocks the federal government from creating a digital version of the dollar that citizens could hold or use.
Why we flagged it
The bill's sole operative mechanism is a blanket prohibition on federal issuance of CBDC. It does not create a new program, fund an initiative, or establish a carve-out—it removes authority. This is straightforward regulatory restriction, not a subsidy, carve-out, or hidden rider.
What the text implies
- Blocks not only direct CBDC issuance but also indirect distribution through custodial intermediaries and supervised banks, foreclosing hybrid models that might have balanced privacy and financial inclusion.
- Prevents Federal Reserve from holding government-issued CBDC as an asset, which may constrain future monetary policy tools or cross-border settlement mechanisms if other nations adopt CBDCs.
The full analysis lists 4 implications of this text.
Who stands to gain
traditional banking sector (reduced competition from government-issued digital payment rails); private cryptocurrency and stablecoin issuers (no government alternative to compete with)