US Central Bank Digital Currency Ban: What Public Law 119-101 Actually Says
A ban on a United States central bank digital currency became law on 11 July 2026. It arrived inside a housing bill. The provision is Title XI, section 1101 of the 21st Century ROAD to Housing Act, Public Law 119-101, originally H.R. 6644.
Section 1101 adds a new section 16A to the Federal Reserve Act, codified at 12 U.S.C. 423. The operative words are narrow and worth reading directly, because the summaries around this law have been loose.
- Public Law
- 119-101
- Became law
- 11 Jul 2026
- Signed by President
- No
- Sunset
- 31 Dec 2030
What the section prohibits
Subsection (b) bars the Board of Governors of the Federal Reserve System or a Federal reserve bank from issuing or creating a central bank digital currency, or any digital asset that is substantially similar to one, "directly or indirectly through a financial institution or other intermediary". The intermediary language matters. A two-tier design routed through commercial banks is covered, not just a retail account held at the Fed.
The definition in subsection (a) is four cumulative conditions. A central bank digital currency is a digital asset that is denominated in United States dollars, is a United States currency, is a direct liability of the Federal Reserve System, and is widely available to the general public. Something that fails any one of those conditions falls outside the definition. Wholesale settlement assets not widely available to the public are the obvious gap.
Subsection (c) carves out any dollar-denominated currency that is "open, permissionless, and private, and fully preserves the privacy protections of United States coins and physical currency". That is the only exception, and it sets cash as the privacy benchmark.
Subsection (e) adds that nothing in the section should be read as authorising the Fed to issue a CBDC absent an Act of Congress. So the default is no, with or without this section.
It expires, and it was not signed
Subsection (d) is a sunset: the section ceases to be effective on 31 December 2030. This is a four-year pause, not a permanent settlement.
That detail is often reported as a veto or a delay. It was neither. The bill was not returned, so the ten-day rule completed enactment. Section 1101 carries no delayed effective date of its own, so it applies from enactment, unlike other parts of the Act that name a date such as 1 October 2026.
What it does not change
The Federal Reserve was not building a retail digital dollar, so the immediate practical effect is limited. This forecloses an option rather than reversing a deployment.
More to the point for payment privacy: none of the surveillance that exists today is touched. Bank and card networks still record counterparty, amount, time, and location. Stablecoin transfers still settle on public ledgers where addresses can be clustered and linked to identity at exchange on-ramps. The definition of a digital asset here is borrowed from the GENIUS Act, which regulates that private stablecoin market rather than restricting it.
A ban on one unbuilt government system does not make private payment rails private. For how that comparison plays out in practice, see virtual cards compared with stablecoin wallets.
Status
In force as of 6 August 2026, codified at 12 U.S.C. 423, sunsetting 31 December 2030. Claims that the ban is permanent, or that it was blocked by the lack of a signature, are not supported by the text of the law.
Sources
Frequently Asked Questions
Is a US central bank digital currency now banned?
Yes, for now. Section 1101 of the 21st Century ROAD to Housing Act adds section 16A to the Federal Reserve Act, barring the Board of Governors and the Federal Reserve banks from issuing a central bank digital currency. The section ceases to be effective on 31 December 2030.
When did the ban take effect?
The Act became law on 11 July 2026 without the President’s signature, under the constitutional ten-day rule. Section 1101 carries no delayed effective date, so it applies from enactment.
Does the ban stop the Federal Reserve using intermediaries?
The prohibition covers issuing or creating a CBDC, or any digital asset substantially similar to one, whether directly or indirectly through a financial institution or other intermediary.
Does this improve payment privacy in practice?
It removes one hypothetical future system. It changes nothing about existing bank, card, and stablecoin surveillance, which is where actual payment data exposure happens today.