The U.S. House of Representatives is considering a strategy to potentially block the Federal Reserve from issuing a central bank digital currency (CBDC) by attaching the Anti-CBDC Surveillance State Act to the Digital Asset Market Clarity Act. This legislative maneuver, discussed during a House Rules Committee hearing on Monday, aims to integrate the CBDC ban into the existing market structure bill, which already passed the House in July.

The Anti-CBDC Surveillance State Act, also passed in July, seeks to prevent the Federal Reserve from issuing a CBDC to consumers. By combining this bill with the Digital Asset Market Clarity Act, proponents hope to expedite the process of sending a comprehensive package to the Senate for consideration. This approach, known as the engrossment method, would essentially add the CBDC ban to the final version of the market structure bill.

This isn't the first time House Republicans have considered such a move. Previously, a similar strategy was weighed during discussions on the GENIUS Act, a bill focused on regulating payment stablecoins. Some lawmakers had pushed for an explicit CBDC ban to be included in the stablecoin bill, but this slowed down the process. Ultimately, all three bills—the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act—passed the House with some bipartisan support. The GENIUS act has been sent to President Trump to be signed into law.

It remains uncertain how the Senate will respond to this combined House bill. Republicans on the Senate Banking Committee have stated that their version of the market structure bill, called the Responsible Financial Innovation Act, is built upon the CLARITY Act but remains distinct legislation. Senator Cynthia Lummis, a key figure behind the Senate market structure bill, indicated that the Banking Committee aims to pass the legislation by the end of September, with the possibility of President Trump signing it into law by 2026. However, no vote has been scheduled with the banking committee yet.

The proposed CBDC ban reflects concerns among some lawmakers regarding the potential impact of CBDCs on traditional financial systems. Proponents of the ban argue that it is necessary to safeguard the dominance of the U.S. dollar and prevent a premature shift towards a digital currency model. The market structure bill, more broadly, seeks to address financial regulations, including the oversight of stock exchanges, trading platforms, and fintech innovations.

Critics of the ban, however, suggest that it could hinder the United States' ability to compete in the evolving global financial landscape. Other countries, like China and the European Union, are already exploring and piloting CBDCs. Some experts fear that a ban could leave the U.S. behind in the digital currency race.

The Independent Community Bankers of America (ICBA) has expressed its support for measures that protect community banks from potential negative consequences that could arise from digital assets. The ICBA recognizes the importance of a clear regulatory framework for stablecoins and other digital assets.