The idea of a CBDC is that a nation or other jurisdiction’s central bank issues and manages the activity of an asset that would be akin to a government stablecoin. The European Central Bank has been working on a digital euro that’s set to get a pilot program next year and a full launch in 2029. China also pursued a digital yuan issued by the People’s Bank of China.
In past remarks, former U.S. Fed Chair Jerome Powell had said that even were the Fed to consider a CBDC, it would have left the operation and management of it to banks, seeming to undermine the possibility of a financial police state described by Republican critics. But new Fed Chair Kevin Warsh had said during his nomination hearing that he fully opposed a U.S. CBDC, calling it a “bad policy choice.”
President Donald Trump signed an executive order in January 2025 that prohibited his administration from making any moves toward a CBDC, which he said would “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States.”
Trump’s congressional allies agreed and inserted it into the unrelated housing bill, which states that “the Board of Governors of the Federal Reserve System or a Federal reserve bank may not issue or create a central bank digital currency or any digital asset that is substantially similar to a central bank digital currency directly or indirectly through a financial institution or other intermediary.”
