The United States entered 2025 with one of the world’s most complex — and politically charged — debates on digital money. While more than 130 countries are exploring or piloting central-bank digital currencies, Washington has taken a sharply different path. Federal policymakers have blocked work on a retail central-bank digital currency (CBDC), even as the Federal Reserve and the private sector continue researching next-generation wholesale payment infrastructures.
The term “digital dollar” has come to describe two distinct concepts in the U.S. policy debate. The first is a retail CBDC, a digital liability of the Federal Reserve available to all citizens. The second refers to privately issued, dollar-denominated stablecoins or tokenised deposits backed by reserves. These private instruments have expanded rapidly, influencing policy far more than any central-bank initiative.
Federal Reserve Research but No Retail CBDC
Between 2020 and 2024, the Fed explored high-speed transaction architectures through Project Hamilton with MIT, which tested a processor capable of more than a million transactions per second. The New York Fed’s Regulated Liability Network (RLN) pilot and the later Regulated Settlement Network (RSN) examined shared-ledger settlement for domestic and cross-border payments using tokenised central-bank reserves and bank deposits. These experiments demonstrated technical feasibility but had no policy mandate behind them.
In parallel, the Federal Reserve joined Project Agorá under the Bank for International Settlements, focusing on multi-currency wholesale settlement. The work remains experimental, emphasising tokenised wholesale infrastructures rather than retail CBDCs.
A Political Turn Against CBDCs
The U.S. debate shifted dramatically in early 2025. President Donald Trump signed Executive Order 14178, which prohibits federal agencies from creating, issuing or using a CBDC. It reversed prior policy work initiated under President Biden’s 2022 Executive Order 14067, which directed agencies to study CBDC options. Congress reinforced the new stance with the Anti-CBDC Surveillance State Act, which passed the House in September 2025 and prohibits the Fed from issuing a CBDC or running pilot programs without legislative approval.
Supporters of the ban argue a CBDC could enable financial surveillance and federal overreach. Opponents warn the move risks leaving the U.S. behind as global payment systems modernise. Federal Reserve Governor Christopher Waller has repeatedly questioned whether a retail CBDC solves any real problem, describing it as “a solution in search of a problem.”
Stablecoins Become the U.S. Digital Dollar
With federal restrictions on CBDCs, the private sector has taken the lead. U.S.-denominated stablecoins — particularly those backed 1:1 by dollars or short-term Treasuries — have become central to the digital-dollar ecosystem.
In July 2025, Congress passed the GENIUS Act, the country’s first federal framework governing stablecoin issuers. The law requires full-reserve backing, monthly disclosures, strict consumer protections and adherence to anti-money-laundering rules. State and federal regulators now coordinate oversight, and issuers must comply with technical capabilities allowing legal enforcement actions such as freezing or burning tokens. The White House argues these standards strengthen dollar dominance in global digital finance.
Arguments For and Against the Digital Dollar
Proponents of further digital-dollar research argue the U.S. risks losing influence to countries like China or Europe, where CBDC pilots are more advanced. They highlight benefits such as cheaper cross-border transfers and greater resilience for wholesale settlement systems.
Opponents cite privacy risks, national-security concerns and the strength of existing payment infrastructure, including the private RTP network and the Federal Reserve’s FedNow service, which already offer real-time payments without creating a new form of government-issued money. Privacy advocates have strongly supported legislative efforts to prohibit CBDC development.
Where the U.S. Stands Today
As of November 2025, the U.S. has no retail CBDC project underway. Federal law and executive action require congressional approval for any research, and the executive branch has ordered agencies not to pursue one. Stablecoins, not central-bank digital money, are emerging as the primary digital-dollar instruments, backed by strict federal regulation.
Meanwhile, the Federal Reserve continues wholesale experiments using simulated data, building knowledge but remaining far from issuing any form of digital currency. The result is a uniquely American approach: no digital dollar for citizens, a rapidly expanding regulated stablecoin sector, and ongoing wholesale innovation that may reshape the financial system behind the scenes.
Sources
Federal Reserve — Central Bank Digital Currency (CBDC):
https://www.federalreserve.gov/central-bank-digital-currency.htm
Federal Reserve Bank of Boston & MIT — Project Hamilton Phase 1:
https://www.bostonfed.org/news-and-events/press-releases/2022/frbb-and-mit-open-cbdc-phase-one.aspx
Federal Reserve Bank of New York — Wholesale Digital Asset Settlement (RLN):
https://www.newyorkfed.org/aboutthefed/nyic/facilitating-wholesale-digital-asset-settlement
SIFMA — Regulated Settlement Network (RSN):
https://www.sifma.org/news/press-releases/members-of-the-u-s-financial-sector-demonstrate-feasibility-of-multi-asset-and-cross-network-settlement-using-shared-ledger-technology/
BIS — Project Agorá:
https://www.bis.org/about/bisih/topics/fmis/agora.htm
Federal Register — Executive Order 14067:
https://www.federalregister.gov/documents/2022/03/14/2022-05471/ensuring-responsible-development-of-digital-assets
White House — Executive Order 14178 (2025):
https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/
U.S. Congress — Anti-CBDC Surveillance State Act (H.R. 1919):
https://www.congress.gov/bill/119th-congress/house-bill/1919
Regulatory Review — “The Digital Dollar Divide”:
https://www.theregreview.org/2025/09/30/krause-the-digital-dollar-divide/
Digital Dollar Pilot Prevention Act (H.R. 3712):
https://docs.house.gov/meetings/BA/BA00/20230920/116343/BILLS-118HR3712ih.pdf
White House — GENIUS Act Fact Sheet:
https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/
Federal Reserve Board — Governor Waller Speeches:
https://www.federalreserve.gov/newsevents/speech/waller20250820a.htm
https://www.federalreserve.gov/newsevents/speech/waller20210805a.htm
Digital Dollar Project:
https://digitaldollarproject.org/
Atlantic Council — CBDC Tracker:
https://www.atlanticcouncil.org/cbdctracker/