The United States Senate voted 89-10 in March 2026 to bar the Federal Reserve from issuing a central bank digital currency through 2030. President Trump has pledged never to allow a CBDC. Yet the Federal Reserve Bank of New York sits at the table in Project Agorá, a Bank for International Settlem...
"We don't have a central bank president who is going to get out there and speak about wholesale or retail CBDC, but that does not mean that we are not looking at how to create one." — Timothy Massad, Former CFTC Chairman (2014–2017)
The United States Senate voted 89-10 in March 2026 to bar the Federal Reserve from issuing a central bank digital currency through 2030. President Trump has pledged never to allow a CBDC. Yet the Federal Reserve Bank of New York sits at the table in Project Agorá, a Bank for International Settlements initiative testing tokenized wholesale central bank money across seven central banks and 41 financial institutions. Former CFTC Chairman Timothy Massad, speaking at the Digital Money Summit 2026 in London on May 19, said the contradiction is deliberate: "The market could overrule the White House."
The disconnect between political rhetoric and institutional action reflects a broader global dynamic. According to the Atlantic Council's CBDC Tracker, 146 countries representing over 98% of global GDP are exploring digital currencies, with 49 in active pilot phases. The stablecoin market — now $323 billion — processed an estimated $46 trillion in transaction volume in 2025, exceeding PayPal's volume by 20x. Central banks are not ignoring this. They are quietly building infrastructure to ensure sovereign money remains relevant in a tokenized financial system.
On March 12, 2026, the U.S. Senate passed the 21st Century ROAD to Housing Act with an embedded provision banning the Federal Reserve from issuing a CBDC through December 2030. The vote was 89-10 — overwhelmingly bipartisan. The provision reflects President Trump's 2024 campaign pledge: "As your president, I will never allow the creation of a central bank digital currency."
The ban covers issuance. It does not cover research, exploration, or participation in multilateral experiments. This distinction matters.
The House of Representatives has not yet acted on the bill. Some House conservatives object that the ban is temporary — they want a permanent prohibition. The bill's path to the president's desk remains uncertain, complicated further by Trump's stated refusal to sign legislation without a voter-ID provision attached.
Mark Gould, the Federal Reserve's Chief Payments Executive, told CoinDesk at the Digital Money Summit that a CBDC is "not under our remit" at present. He acknowledged, however, that any future government-backed digital dollar would fall under Fed responsibility. The phrasing was precise: not a denial of work, but a jurisdictional boundary statement.
Project Agorá — named from the Greek word for "marketplace" — launched in April 2024 as a BIS Innovation Hub initiative. Its stated objective: test whether tokenized wholesale central bank money and tokenized commercial bank deposits can coexist on a unified programmable platform to improve cross-border payments.
Seven central banks participate:
| Central Bank | Currency | |---|---| | Federal Reserve Bank of New York | USD | | Bank of France (Eurosystem) | EUR | | Bank of Japan | JPY | | Bank of Korea | KRW | | Bank of Mexico | MXN | | Swiss National Bank | CHF | | Bank of England | GBP |
The New York Fed participates through its New York Innovation Center on what it describes as "an exploratory basis." The commercial banking side involves 41 institutions coordinated by the Institute of International Finance (IIF).
The project entered its user testing phase in early 2026, described by BIS Deputy General Manager Andréa Maechler as "a major milestone." Testing is expected to last approximately six months, with a lessons-learned report due in the first half of 2026. The platform tests atomic settlement — simultaneous, irrevocable exchange of payment and settlement assets — targeting compression of cross-border transaction times from days to seconds.
Federal Reserve Governor Waller confirmed in 2026 that the U.S. would continue its participation. The project focuses exclusively on wholesale bank-to-bank payments, not retail consumer transactions — a framing that provides political cover by distinguishing infrastructure research from consumer-facing CBDC issuance.
Timothy Massad served as CFTC Chairman from 2014 to 2017 and is now a senior fellow at the Harvard Kennedy School. His remarks at the Digital Money Summit on May 19, 2026, were notable for their directness.
Massad's core argument: the evolution of tokenized finance will eventually force a government-backed digital alternative into existence regardless of political positioning. Global market dynamics — not political will — will determine the outcome.
He specifically cited Project Agorá as evidence that behind-the-scenes work continues. While Massad no longer holds a government position, his statements carry weight given his ongoing engagement with regulatory discussions — he testified before the Senate Banking Subcommittee on Digital Assets as recently as February 2025.
The statement draws a line between two U.S. policy tracks: the public-facing anti-CBDC rhetoric aimed at domestic political audiences, and the institutional participation in multilateral infrastructure experiments aimed at maintaining the dollar's settlement primacy in a tokenizing global financial system.
On May 8, 2026, ECB President Christine Lagarde delivered a speech at the Banco de España Latam Economic Forum titled "Stablecoins and the Future of Money: Separating Functions from Instruments." The speech provided the most detailed central bank critique of stablecoin-dependent financial infrastructure to date.
Key data points from Lagarde's remarks:
Lagarde's monetary policy concern: large-scale deposit migration into stablecoins would narrow the channel through which ECB interest rate decisions reach firms and households. If deposits shift from banks to non-bank stablecoin issuers and return only as wholesale funding, lending efficiency declines and monetary policy transmission weakens.
Europe's response is infrastructure-first. The ECB plans to launch Pontes — its wholesale DLT settlement solution — in September 2026, enabling central bank money settlement for tokenized transactions. The broader Appia roadmap targets a fully interoperable European tokenized financial ecosystem by 2028. Both are designed to ensure that tokenized finance settles in sovereign central bank money rather than private stablecoins.
The contrast with the U.S. approach is stark: Europe builds openly; the U.S. participates quietly.
According to the Atlantic Council's CBDC Tracker, the global landscape as of 2026:
| Status | Countries | |---|---| | Launched | 4 (Bahamas, Jamaica, Nigeria, Zimbabwe) | | Pilot phase | 49 | | Development | 20 | | Research | 36 | | Total exploring | 146 (98%+ of global GDP) |
Notable 2026 developments:
The trajectory is clear: sovereign digital currencies are not a question of "if" but "when" for most major economies. The U.S. remains the most prominent holdout in terms of public posture, while simultaneously participating in the multilateral infrastructure that would underpin such a system.
The stablecoin market reached $323.2 billion in market capitalization as of mid-May 2026, according to CoinMarketCap — the third consecutive monthly record. USDT commands $189.7 billion (58.76% market share); USDC holds $77.9 billion.
The $46 trillion in estimated 2025 stablecoin transaction volume represents a monetary flow that central banks cannot ignore. Lagarde's data showing that a $3.5 billion inflow into dollar-backed stablecoins lowers three-month Treasury bill yields by 2.5–3.5 basis points — with the effect doubling during T-bill shortages — quantifies the link between stablecoin growth and sovereign debt markets.
U.S. regulatory efforts reflect this tension. The Clarity Act compromise text, currently advancing through the Senate Banking Committee, attempts to thread a needle: allowing crypto firms to offer stablecoin reward programs while prohibiting yield that functions as the economic equivalent of bank deposit interest. The National Credit Union Administration published proposed stablecoin issuer standards on May 15, 2026, under the GENIUS Act framework.
The regulatory strategy is to domesticate stablecoins — bring them inside the regulated perimeter — while publicly opposing a government-issued digital dollar. Whether this posture is sustainable as the rest of the world builds CBDC infrastructure remains an open question.
The tension between political CBDC opposition and institutional CBDC infrastructure participation creates a multi-layered value distribution problem.
If cross-border settlement migrates to tokenized central bank money platforms like Project Agorá, the economic beneficiaries shift: from correspondent banking networks capturing multi-day settlement float, to technology infrastructure providers operating atomic settlement platforms. The BIS estimates that cross-border payment costs average 6.3% for remittances globally; atomic settlement compression represents a direct value transfer from intermediaries to end-users.
If stablecoins instead capture this settlement layer — the trajectory implied by their $46 trillion in 2025 volume — value accrues to private issuers (Tether, Circle) and their Treasury holdings rather than to sovereign monetary systems. Lagarde's concern about monetary policy transmission is fundamentally about who captures the economic rents of the payment layer.
Europe's infrastructure choices (Pontes, Appia) aim to ensure sovereign capture. The U.S. approach — quiet participation in Agorá while publicly banning CBDCs — suggests policymakers recognize the stakes but lack political consensus on the solution.
The gap between U.S. CBDC rhetoric and U.S. CBDC action is measurable. A Senate supermajority banned issuance while the New York Fed tests tokenized settlement infrastructure. A president pledges to block a digital dollar while his administration participates in the BIS project that would underpin one.
This is not unusual in monetary policy. Central banks routinely build capabilities years before political mandates authorize their deployment. The Federal Reserve developed FedNow for years before launching it. The question is whether the political ban creates a structural disadvantage: Europe and Asia build openly, attract talent and institutional commitment, while the U.S. builds in the margins of multilateral projects.
Massad's assessment that markets will overrule politics reflects a specific historical pattern — the same pattern that saw the U.S. adopt electronic payments, abandon the gold standard, and eventually launch FedNow despite decades of resistance from incumbent payment networks. The infrastructure work happens regardless. The political permission follows.
The $323 billion stablecoin market is the immediate pressure point. It already intersects with Treasury markets, monetary policy transmission, and cross-border payment flows. Whether the U.S. response takes the form of a regulated stablecoin regime, a wholesale CBDC, or both, the infrastructure being tested in Project Agorá will likely form part of the foundation.