Legislative Developments on Central Bank Digital Currency
The US House of Representatives is exploring a streamlined legislative route to prevent the Federal Reserve from launching a central bank digital currency (CBDC). This may involve incorporating the Anti-CBDC Surveillance State Act into the Digital Asset Market Clarity Act, a market structure bill previously passed in July.
Previous Legislative Efforts
Earlier this year, House Republicans considered a similar approach concerning the GENIUS Act, which focuses on regulating payment stablecoins. Some legislators expressed a desire to include a CBDC prohibition in that bill before it was up for a vote, which delayed progress as they approached the August recess. Ultimately, all three legislative proposals received bipartisan approval.
Senate Considerations
The implications of combining the market structure bill with a CBDC ban for Senate action remain uncertain. Members of the Senate Banking Committee, predominantly Republican, indicated their initiative on market structure legislation—dubbed the Responsible Financial Innovation Act—would differ from the House’s approach, even as it draws from the principles of the CLARITY Act.
In remarks, Senator Cynthia Lummis of Wyoming, a leading supporter of the market structure bill, mentioned a plan for the banking committee to advance this legislation by the end of September, with an optimistic outlook for President Donald Trump to potentially sign it before the conclusion of 2026.
However, at the time of this report, no voting schedule was available for the committee.
Political Dynamics
While Republicans hold the majority in both the House and Senate, the narrow margins may necessitate collaboration with Democrats for the passage of the proposed market structure legislation. Democratic leaders have their own framework for market regulation but have highlighted concerns over what they view as Trump’s detrimental influence on the digital asset sector, citing involvement in family-associated crypto initiatives.
The current stance of Republicans regarding whether to explicitly address Trump’s cryptocurrency affiliations—namely his family’s mining operation, American Bitcoin, and related ventures—within the bill was not clearly defined. A committee vote on the legislation is anticipated to occur within the next fortnight.
