Svmuu News Investment bank TD Cowen stated that the US Congress may be close to passing legislation to permanently prohibit the Federal Reserve from issuing a Central Bank Digital Currency (CBDC). This move could benefit stablecoin issuers but may also introduce new complexities for crypto market structure legislation.
Last week, US Senator Ted Cruz proposed an amendment within the housing bill, the "21st Century ROAD to Housing Act," seeking a permanent ban on the Fed issuing a CBDC. The amendment aims to convert the current temporary ban, effective until 2030, into a permanent rule. The housing bill is expected to be submitted to the Senate for a vote as early as this week.
Jaret Seiberg, Managing Director of TD Cowen's Washington Research Group, said it is anticipated that the final housing bill sent to the President for signature will likely include this ban, with the possibility of a permanent ban being higher than a temporary one.
Seiberg pointed out that the amendment essentially solidifies the current policy stance. The Federal Reserve has previously stated multiple times that it would not issue a digital dollar without explicit authorization from Congress.
Meanwhile, several US lawmakers recently sent a joint letter to Congressional leadership, urging a permanent ban on CBDCs. Representative Ralph Norman stated that unlike cash, CBDCs could potentially allow the government to track transactions and monitor individual spending, making a permanent ban necessary to protect Americans' privacy and freedom.
It is worth noting that the US House of Representatives passed the "Anti-CBDC Surveillance State Act" last year, prohibiting the Federal Reserve from issuing a CBDC directly to individuals. Cruz has also been actively pushing for the Senate to pass similar legislation.