US CBDC Restriction in Public Law 119-101
Public Law 119-101 added a temporary central bank digital currency prohibition to the Federal Reserve Act. Title XI, Section 1101 creates a new Section 16A that bars the Federal Reserve from issuing or creating a covered CBDC directly or indirectly through a financial institution or other intermediary. Enacted text, retrieved 10 August 2026.
- Public law
- 119-101
- https://www.govinfo.gov/app/details/PLAW-119publ101 | Retrieved 10 August 2026
- CBDC provision
- TITLE XI §1101
- https://www.govinfo.gov/content/pkg/PLAW-119publ101/html/PLAW-119publ101.htm | Retrieved 10 August 2026
- Issuer covered
- FEDERAL RESERVE
- https://www.govinfo.gov/content/pkg/PLAW-119publ101/html/PLAW-119publ101.htm | Retrieved 10 August 2026
- Sunset
- 31 DEC 2030
- https://www.govinfo.gov/content/pkg/PLAW-119publ101/html/PLAW-119publ101.htm | Retrieved 10 August 2026
CORRECTION TO THE APPROVED LEAD
The enacted CBDC text is not in Sections 803 and 804. Those final-law sections concern housing studies. The operative text is Title XI, Section 1101, which adds Section 16A to the Federal Reserve Act. Public Law 119-101, retrieved 10 August 2026.
The statutory definition
The definition covers a digital asset that satisfies four conditions: it is denominated in US dollars, is a United States currency, is a direct liability of the Federal Reserve System, and is widely available to the general public. The law imports the term digital asset from the GENIUS Act. Federal Reserve Act Section 16A(a), retrieved 10 August 2026.
What the prohibition does
Section 16A(b) says the Federal Reserve Board or a Federal Reserve bank may not issue or create a CBDC, or a substantially similar digital asset, directly or indirectly through a financial institution or other intermediary. Section 16A(b), retrieved 10 August 2026.
Section 16A(c) creates an exception for dollar-denominated currency that is open, permissionless, private, and fully preserves the privacy protections of US coins and physical currency. The text does not define how a system must prove each of those conditions. Section 16A(c), retrieved 10 August 2026.
What it does not ban
The definition does not reach a private dollar token merely because it is digital or dollar-denominated. To be a CBDC under this section, the asset must also be a direct Federal Reserve liability and widely available to the public. Section 16A(a), retrieved 10 August 2026.
The provision does not authorize issuance. Its rule of construction says nothing in the section permits a CBDC or substantially similar asset without authorization by an Act of Congress. Section 16A(e), retrieved 10 August 2026.
Enactment and current Federal Reserve position
The Office of the Federal Register note says H.R. 6644 was presented to the President on 29 June and became law without a signature on 11 July 2026. The statutory CBDC section ceases to be effective on 31 December 2030. Enactment note and Section 16A(d), retrieved 10 August 2026.
The Federal Reserve's own FAQ says it has made no decision to issue a CBDC and would proceed only with an authorizing law and support from the executive branch and Congress. That page describes the institution's stated position; Public Law 119-101 supplies the current statutory restriction. Federal Reserve CBDC FAQ, retrieved 10 August 2026; enacted law, retrieved 10 August 2026.
The operative result is narrower than a ban on digital dollars as a category. It is a time-limited restriction on a Federal Reserve liability meeting the law's definition, with an exception and an express requirement for congressional authorization. Title XI, retrieved 10 August 2026.
Sources
- Public Law 119-101, retrieved 10 August 2026.
- GovInfo Public Law 119-101 package, retrieved 10 August 2026.
- Federal Reserve CBDC discussion page, retrieved 10 August 2026.
Frequently Asked Questions
What CBDC provision became law in Public Law 119-101?
Title XI, Section 1101 adds Section 16A to the Federal Reserve Act and bars the Federal Reserve from issuing or creating a covered CBDC directly or through an intermediary. Source: https://www.govinfo.gov/content/pkg/PLAW-119publ101/html/PLAW-119publ101.htm. Retrieved 10 August 2026.
Does the US CBDC prohibition cover private stablecoins?
Not under this definition. A covered CBDC must be a direct liability of the Federal Reserve System and widely available to the general public. Source: https://www.govinfo.gov/content/pkg/PLAW-119publ101/html/PLAW-119publ101.htm. Retrieved 10 August 2026.
When does the CBDC provision expire?
The new Federal Reserve Act Section 16A says its provisions cease to be effective on 31 December 2030. Source: https://www.govinfo.gov/content/pkg/PLAW-119publ101/html/PLAW-119publ101.htm. Retrieved 10 August 2026.