- Federal Reserve confirms CBDC work has stopped, and no plans are currently under review.
- Officials say no legal authority exists for CBDC issuance without Congress’s approval.
- Regulatory focus shifts to digital assets supervision and fintech innovation oversight.
Federal Reserve officials have confirmed that the U.S. central bank is not looking into the development of a central bank digital currency (CBDC), stating that earlier work in this area has been discontinued. The clarification was delivered during congressional testimony, where policymakers examined the status of digital asset initiatives alongside executive directives and legal constraints governing the Federal Reserve’s authority.
During the session, lawmakers cited an executive order issued by President Donald Trump directing federal agencies to halt any CBDC-related efforts. In response, officials from the Federal Reserve confirmed that their current position aligns with that directive.
They pointed to earlier statements from Chair Jerome Powell, who has said that CBDC development is no longer underway. He also indicated that the Federal Reserve does not view itself as having the legal authority to issue a digital currency without explicit congressional approval. This position applies specifically to a retail CBDC designed for general public use.
At the same time, lawmakers raised concerns about whether a wholesale CBDC intended for transactions between financial institutions was still under consideration. However, the testimony did not provide any indication that such work is actively ongoing, strengthening the broader pause across CBDC-related initiatives.
Regulatory Focus Shifts to Digital Assets
Although CBDC efforts have stopped, the Federal Reserve confirmed that its work on digital assets continues within a supervisory and regulatory context. Officials explained that risks associated with digital asset activities are now incorporated into routine bank supervision.
In line with this shift, the central bank has taken steps to adjust its regulatory approach. It rescinded several earlier supervisory communications related to crypto activities and, in December 2025, introduced a revised policy framework intended to support responsible innovation among supervised institutions.
Additionally, regulators have clarified expectations around crypto-asset safekeeping and provided guidance on the capital treatment of tokenized securities. These developments are part of ongoing coordination with other U.S. banking regulators as they prepare to implement provisions tied to the GENIUS Act.
Oversight Continues as Innovation Advances
Federal Reserve officials also outlined broader efforts to oversee emerging technologies, including artificial intelligence and bank-fintech partnerships. They noted that while these innovations may improve efficiency and expand financial services, they also require structured risk management and supervision.
To support this balance, the Federal Reserve has begun increasing transparency around its supervisory practices. This includes publishing internal operating principles and releasing previously non-public supervisory materials to provide greater visibility into how banks are regulated.
Related: Elizabeth Warren Blocks Permanent CBDC Ban in Senate Bill
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