New Bill Bans Fed From Developing Digital Dollar, Blocks Direct Public Accounts

The aptly named Anti-CBDC Surveillance State Act is a massive stop sign planted directly in front of the Federal Reserve’s digital currency ambitions. Essentially, this bill doesn't just tap the brakes on the idea of a Central Bank Digital Currency (CBDC)—it completely yanks the steering wheel and cuts the engine. The core purpose is to prevent the Fed from ever issuing a digital dollar and, critically, from ever offering financial services directly to you or me.

The Fed Gets Kicked Out of Retail Banking

First, let’s talk about Section 2. This part is clear: Federal Reserve banks are now prohibited from offering any products or services directly to individuals. That means no Fed-run checking accounts, no savings accounts, and no personal financial services. The Fed’s job is strictly limited to dealing with commercial banks and the government—not competing for your retail deposit dollars. This maintains the two-tiered banking system we have now, which is a huge win for existing commercial banks who don't want the government as a competitor for your money. For the rest of us, it closes the door on the idea of a universally accessible, risk-free Fed account, which some advocates hoped could help the millions of unbanked Americans.

The Digital Dollar Lockout

The real showstopper is the total ban on the CBDC. Section 4 explicitly prohibits the Federal Reserve Board and the Federal Open Market Committee (FOMC) from testing, studying, developing, creating, or implementing a CBDC. They can’t even use one as a tool for monetary policy, like setting interest rates. This ban is so comprehensive that Section 3 makes sure the Fed can’t try to sneak around it by using a third party, like a commercial bank, to distribute a digital dollar to the public. If the Fed wanted to pilot a small digital currency program to see how it works, this bill says, “Absolutely not.”

Why does this matter to your wallet? A government-backed digital dollar (a CBDC) was often floated as a potential successor to cash, offering instant, secure payments. The fear, which this bill addresses, is that a CBDC could allow the government to track every single transaction you make, essentially creating a “surveillance state” of your finances. By banning it, the bill ensures that option is off the table.

The Privacy Loophole

There is a fascinating exception in Section 4 that shows where Congress is willing to draw the line. The ban doesn't stop the creation of a digital, dollar-denominated currency if it is “permissionless” (open to everyone without needing approval) and “fully protects the privacy you get when using physical coins and paper cash.” In other words, if someone can invent a digital dollar that is as private as handing over a twenty-dollar bill, this law won’t stop it. This carve-out seems designed to encourage private innovation while strictly limiting government control.

Congress Draws a Line in the Sand

Finally, Section 5, the “Sense of Congress,” is Congress planting its flag. It states that the Fed currently has zero legal authority to create a CBDC and won’t get that power unless Congress explicitly grants it through the constitutional process. This is less about policy and more about a power struggle, ensuring that any massive change to the nation’s currency infrastructure—like creating a digital dollar—must go through the messy, public, and often slow legislative process, rather than being decided by unelected officials at the Fed.