US Congress Blocks Federal Reserve From Developing a CBDC
The US House of Representatives has included a ban on the development of a central bank digital currency (CBDC) in the 2026 defense budget. The move, outlined in bill H.R. 3838 (Anti-CBDC Act), prevents the Federal Reserve from testing, designing, or launching a digital dollar. The only exception applies to dollar-based currencies that remain open, permissionless, and provide privacy protections comparable to cash.
Republican lawmakers, led by House Majority Whip Tom Emmer, have positioned the Anti-CBDC Act as a safeguard against government overreach. Emmer argued that a digital dollar could enable China-style financial surveillance, undermining the privacy of American citizens. The bill reflects growing skepticism among Republicans toward CBDCs, with critics framing them as tools for political control.
Trump Administration Revives Anti-CBDC Push
While Emmer first introduced the idea back in 2023, it lacked enough traction to advance. However, following Donald Trump’s return to the White House, the initiative was revived and restructured. The new version has now advanced through the House and is heading for Senate review, signaling a clear policy shift against CBDCs under the current administration.
Europe Eyes Ethereum and Solana for a Digital Euro
Meanwhile, across the Atlantic, the European Central Bank (ECB) is weighing the possibility of issuing a digital euro on Ethereum and Solana networks, according to reports from the Financial Times. While not officially confirmed, insiders suggest that EU regulators are warming up to the idea of leveraging public blockchain technology rather than a fully private system.
Unlike the US approach, European policymakers view CBDCs as a way to reduce dependence on US dollar-backed stablecoins, which currently dominate 98% of the stablecoin market. ECB President Christine Lagarde has stated that a digital euro could launch by October 2025, pending approval from the European Parliament, EU Council, and European Commission. However, surveys show that European citizens remain skeptical, with low public interest in the project.
Asia Shifts Toward Stablecoins Over CBDCs
In Asia, governments are taking a different route by prioritizing stablecoin adoption instead of CBDCs. South Korea scrapped its CBDC pilot earlier this year, opting to regulate stablecoins pegged to the Korean won. The Financial Services Commission plans to release new guidelines in October, covering issuance standards, collateral requirements, and risk management.
Japan is preparing to approve its first yen-backed stablecoin in late 2025. Issuer JPYC expects to circulate assets worth 1 trillion yen ($6.78 billion) within three years, already attracting interest from hedge funds. Similarly, Hong Kong’s Monetary Authority (HKMA) implemented its new stablecoin regulations on August 1, with major firms like JD.com and Ant Group applying for licenses.
In a surprising twist, even China—despite its already operational digital yuan—may allow the issuance of yuan-backed stablecoins, a move that could further reshape Asia’s digital financial landscape.
Conclusion
The global landscape for digital currencies is sharply diverging. While the US shuts the door on CBDCs in favor of preserving financial privacy, Europe pushes ahead with a potential blockchain-based euro, and Asia embraces stablecoins as a more flexible alternative. These contrasting strategies highlight a growing fragmentation in digital currency policy, setting the stage for a future where economic power could hinge on how each region navigates the balance between privacy, innovation, and financial control.
