TD Cowen: The U.S. Congress is close to permanently banning the Federal Reserve from issuing CBDCs

Odaily Planet Daily reports that investment bank TD Cowen states that the U.S. Congress may be close to passing legislation to permanently ban the Federal Reserve from issuing Central Bank Digital Currencies (CBDC). This move could benefit stablecoin issuers but may also introduce new complexities to cryptocurrency market regulation.

Last week, U.S. Senator Ted Cruz proposed an amendment to the housing bill, the “21st Century ROAD to Housing Act,” calling for a permanent ban on the Federal Reserve issuing CBDC. The amendment aims to turn the current temporary ban, valid until 2030, into a permanent regulation. The housing bill is expected to be submitted to the Senate for a vote as early as this week.

Jaret Seiberg, Managing Director of Washington Research at TD Cowen, said that the final housing bill submitted for presidential signature is very likely to include this ban, with a higher chance of a permanent ban than a temporary one.

Seiberg noted that the amendment mainly consolidates the current policy stance. The Federal Reserve has previously stated multiple times that it will not issue digital dollars without explicit congressional authorization.

Meanwhile, several U.S. lawmakers have recently jointly written to congressional leaders, urging a permanent ban on CBDC. Representative Ralph Norman stated that, unlike cash, CBDC could allow the government to track transactions and monitor individual spending behaviors, so a permanent ban is necessary to protect Americans’ privacy and freedoms.

It is worth noting that the U.S. House of Representatives passed the “Anti-CBDC Surveillance State Act” last year, which prohibits the Federal Reserve from directly issuing CBDC to individuals. Cruz has also been pushing for similar legislation in the Senate.