Defense Bill Now Blocks Fed from Issuing a U.S. CBDC

In a strategic move to curb potential government overreach, lawmakers have woven the Anti-CBDC Surveillance State Act into the must-pass National Defense Authorization Act (NDAA). This addition prohibits the Federal Reserve from issuing a central bank digital currency (CBDC)—directly or indirectly—to individuals and bars any related testing, development, or use for monetary policy.

The standalone version of the measure, known as H.R. 1919, had already narrowly passed the House in July with a 219–210 vote. Now, that same language is baked into the Defense bill, ensuring it remains on a trajectory toward becoming law. The shift amplifies the legislation’s importance by attaching it to critical national security funding.

Proponents argue that enabling a CBDC could usher in unprecedented surveillance capabilities—turning the Fed into a potent tool for monitoring Americans’ every transaction. They warn of a perilous slide toward government-controlled, programmable money that erodes privacy and individual freedom.

Meanwhile, opponents—primarily Democrats—express concerns that the provision may stifle essential research and innovation in digital currency technologies. They argue that investigating the benefits of CBDCs in secure, regulated environments is vital to keeping the U.S. competitive globally.

With the NDAA’s progress now tied to these digital currency restrictions, attention turns to the Senate’s upcoming vote (expected in early September) and how the final law will shape the future of U.S. digital money policy—balancing privacy fears against technological advancement.