The U.S. House has incorporated a provision prohibiting the Federal Reserve from issuing a CBDC into the defense bill, a political tactic aimed at passing a controversial policy.
A bold legislative move is taking place in Washington as the U.S. House decides to embed a provision banning the issuance of central bank digital currency (CBDC) into the National Defense Authorization Act (NDAA) for fiscal year 2026.
The NDAA is a mandatory bill that must pass to ensure funding for the military; therefore, it is often used as a 'vehicle' to push policies that would otherwise struggle to pass Congress on their own. This time, Republicans are leveraging the strategic nature of the NDAA to realize a long-standing goal: to prevent the Federal Reserve (Fed) from issuing a CBDC.
This amendment did not appear by coincidence but is the result of a tense political agreement. Previously, the House passed the Anti-CBDC Surveillance State Act by a narrow margin, but prospects in the Senate remain bleak.
The bargaining peaked in July when a group of hardline Republican lawmakers refused to vote on cryptocurrency bills unless they received a commitment that the CBDC ban would be passed. This deadlock led to a procedural vote lasting more than 9 hours – the longest in House history. Ultimately, House Majority Leader Steve Scalise was forced to commit to adding the CBDC ban to the NDAA to break the stalemate.
This provision has a very broad scope: it prohibits the Fed not only from issuing but also from testing, researching, developing, creating, or deploying a CBDC. However, the text also provides an important exception, stating that the ban does not apply to 'any type of dollar-denominated currency that is open, permissionless, and private' – a tacit acknowledgment for stablecoins issued by the private sector.
The political battle over CBDC in the U.S. revolves around concerns about privacy and government surveillance capabilities. Now, with it being directly included in one of the most significant national security bills, the anti-CBDC front has gained additional weight and potential to become a practical policy.
