On the twenty-third of January 2025, President Donald Trump signed Executive Order 14178, directing all federal agencies to immediately terminate any plans or initiatives related to the creation of a central bank digital currency, and prohibiting them from undertaking any action to establish, issue, or promote such a currency within the United States or abroad [1]. The order was received, in some quarters, as the decisive American answer to a question that had been circulating among central bankers, legislators, and constitutional scholars for the better part of a decade. It was, in truth, nothing of the kind. The technical foundations for a programmable dollar had already been substantially established, in open-source code available to any government that wished to study them, by the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology before the executive order was drafted. The constitutional and democratic questions that the order claimed to settle are, by their nature, not susceptible to resolution by executive fiat. And the world, represented by the ninety-one per cent of central banks that the Bank for International Settlements found, in its 2024 survey of ninety-three institutions, to be exploring either a retail or wholesale central bank digital currency [2], has not paused to await the outcome of American domestic politics.
The executive order is, in this sense, better understood as a punctuation mark than as a conclusion: a temporary interruption in a debate that the underlying forces of monetary technology, geopolitical competition, and financial inclusion are likely to reopen, as they have in every previous era when the form of sovereign money has been at issue. Whether one reads Executive Order 14178 as prudent resistance to government overreach or as a strategic retreat from a technology whose first-mover advantages are now accruing to Beijing and Brussels, its effect has been to defer, not to resolve, the most consequential monetary policy question facing the United States since the creation of the Federal Reserve itself.
The Architecture That Was Already Built
The Federal Reserve Bank of Boston’s collaboration with the Digital Currency Initiative at MIT, conducted between 2020 and 2022 under the name Project Hamilton, produced results that deserve more attention than they have received in the subsequent political debate. The research, published in February 2022 and extended by subsequent work released in 2023, demonstrated that a CBDC transaction processor for a high-performance and resilient digital currency was technically feasible at a scale commensurate with American financial needs. The first architectural approach, using an atomiser design, demonstrated throughput of 170,000 transactions per second. The second, employing two-phase commit, achieved 1.7 million transactions per second [3], a figure that comfortably exceeds the aggregate throughput of the existing card payment networks at peak domestic load. The research team subsequently published source code for PArSEC, a parallelised architecture for scalably executing smart contracts, which extended the framework to support programmable payments without requiring a blockchain, an architectural choice that avoided the throughput constraints and energy costs associated with distributed ledger technology while preserving the programmability that gives a central bank digital currency its theoretical advantages over conventional electronic money [3].
The significance of the PArSEC publication has not been lost on those who read it carefully. A transaction processor that supports smart contracts, that can execute programmable rules at the moment of payment, is not merely a digital version of existing money. It is a categorically different instrument: one that can enforce conditions, that funds may be spent only on designated categories of goods, that a government disbursement expires if unclaimed within a defined period, that a payment is blocked if the recipient falls within a specified category of sanctioned parties. These are the capabilities that make programmable sovereign money both technically powerful and constitutionally alarming, and they are capabilities that the Project Hamilton architecture demonstrated in research code that remains publicly available. The question that Executive Order 14178 resolved, provisionally, was not whether such a system could be built. It was, as the debate in Congress made clear, whether it should be, and under what constraints of law and democratic accountability.
The Precedent That Cannot Be Escaped
The political battle over the Federal Reserve Act of 1913 offers an instructive parallel, not because the legislative disputes of that era map precisely onto those of the present one, but because the underlying tension, between the efficiencies of centralised monetary architecture and the democratic anxieties about who controls it, is recognisably the same. Senator Nelson Aldrich’s proposal for a centralised banking system, developed in the aftermath of the financial panic of 1907 and with the participation of the country’s leading commercial bankers at a famously secretive meeting on Jekyll Island, Georgia, was opposed with ferocity by rural and western legislators who feared that it would entrench the power of what they called the Money Trust, the concentration of financial control in the hands of New York’s large commercial banks [4]. The compromise that President Wilson and Congressman Carter Glass ultimately achieved established governmental oversight through a Federal Reserve Board composed of presidential appointees, while distributing operational authority across twelve regional reserve banks specifically designed to limit the influence of any single financial centre [4]. It was an architectural choice driven as much by political necessity as by sound monetary theory, and it shaped the institutional character of American central banking for the century that followed.
The current debate about a digital dollar has the same structure. Those who support CBDC development emphasise efficiencies: faster monetary policy transmission, lower costs for domestic and cross-border payments, and the possibility of providing financial access to the approximately 5.6 million American households that the Federal Deposit Insurance Corporation found, in its most recent national survey, to be without any bank account [5]. Those who oppose it cite the same fundamental concern that the opponents of the Aldrich plan raised in 1913: that an instrument of monetary control, once centralised in its architecture, becomes an instrument of surveillance and coercion available to whoever holds the central authority. The passage of the Anti-CBDC Surveillance State Act through the House of Representatives in July 2025, legislation explicitly invoking Fourth Amendment privacy protections as the constitutional basis for prohibition [5], represents the contemporary expression of that opposition, and it reflects the seriousness with which at least a significant portion of the American political class has approached the question. The Senate subsequently incorporated a CBDC moratorium provision extending through at least 2030 into an amendment to housing legislation, suggesting that the executive order has found meaningful legislative reinforcement.
What China Has Built, and What It Reveals
The opponents of a digital dollar have directed consistent attention to the People’s Bank of China’s digital currency electronic payment system, the e-CNY or digital yuan, as a demonstration of what a programmable sovereign currency can become in the hands of an authoritarian state. The comparison is not without analytical merit, though it requires care in its application. The e-CNY had, by the end of November 2025, processed more than 3.4 billion transactions valued at approximately 16.7 trillion renminbi, roughly $2.3 trillion in dollar terms, and had achieved a wallet base of 2.25 billion, representing a scale of deployment that no other CBDC programme has approached [6]. The People’s Bank describes the system’s privacy model as “controlled anonymity”: smaller transactions carry a degree of privacy protection while larger ones are traceable and subject to state oversight, a formulation that accurately describes a graduated surveillance architecture rather than an absence of one. The technical capabilities of the system include programmable features, among them transaction expiry and the capacity to restrict spending to defined categories of goods, that the PBOC has characterised as instruments of more targeted social and economic policy implementation [6].
It would be mistaken to argue that a digital dollar, designed under American constitutional constraints, would necessarily replicate the surveillance architecture of the e-CNY. The constraints are real and legally meaningful: a CBDC issued by the Federal Reserve would be subject to Fourth Amendment jurisprudence as it applies to financial records, to legislative oversight, and to the institutional independence that the Federal Reserve has maintained since its creation. What the Chinese precedent demonstrates is not inevitability but possibility: that the technical architecture of programmable money is capable of supporting a surveillance infrastructure of extraordinary granularity, and that the design choices embedded in that architecture reflect political values whose character is not determined by the technology itself but by the political and legal system within which it is deployed. The architecture is, in this sense, politically neutral in the same sense that a printing press is politically neutral: its consequences are entirely determined by who controls it and under what constraints.
The architecture is politically neutral in the same sense that a printing press is politically neutral: its consequences are entirely determined by who controls it and under what constraints.
The World Proceeds Without the United States
As the accompanying chart illustrates, the United States is now the only major economy to have formally halted retail central bank digital currency development. The chart, representing the development stage of retail CBDC programmes across twelve significant economies as of early 2026 using Atlantic Council and BIS survey data [2], places the United States at a stage of zero: the only jurisdiction among those shown to have moved from active research to formal discontinuation by executive action.
The contrast with China’s advanced deployment is apparent and already widely discussed. Less remarked upon, but perhaps more consequential for the longer-term competitive landscape, is the trajectory of the European Central Bank’s digital euro programme. The ECB completed its preparation phase in October 2025, having selected technical providers for the system’s core components and developed the draft digital euro scheme rulebook through an innovation platform engaging market participants [7]. The ECB has indicated that if EU lawmakers adopt the enabling regulation, which the European Commission submitted to the Parliament and Council in June 2023 and on which the Council adopted its negotiating position in December 2025, pilot operations could begin in 2027, with a possible first issuance during 2029 [7]. A digital euro issued to more than three hundred million citizens across the eurozone, distributed through the major European commercial banks as licensed intermediaries, would represent a scale of deployment that alters the competitive landscape for international digital payments in ways that the United States, operating through its stablecoin ecosystem alone, may find difficult to address.
The BIS survey data is worth examining at the aggregate level, setting aside the competitive dynamics between individual systems. Of the ninety-three central banks surveyed in 2024, eighty-five were exploring either a retail or wholesale CBDC [2]. The BIS estimates that up to fifteen CBDCs will have been issued globally by 2030, compared to the three retail systems, those of Nigeria, the Bahamas, and Jamaica, that were operational at the time of the survey. The motivation cited most consistently by central banks is not competition with China or with dollar-denominated stablecoins: it is the preservation of the role of central bank money as cash declines and as the tokenisation of traditional financial assets creates new forms of settlement obligation that existing payment infrastructure was not designed to handle. This is a structural argument about the architecture of the monetary system rather than a geopolitical one, and it is likely to reassert itself in the United States regardless of the current administration’s preferences.
The Stablecoin Alternative and Its Limits
The Trump administration’s preferred substitute for a government-issued CBDC is the regulated dollar-denominated stablecoin, a form of private money issued by commercial entities against dollar reserves and operating on public blockchains. The Guiding and Establishing National Innovation for US Stablecoins Act, signed in July 2025, established a framework requiring reserve backing, capital standards, and regulatory oversight for stablecoin issuers [1]. The case for stablecoins as a vehicle for dollar monetary dominance is not without substance: Tether and USD Coin collectively circulate in excess of $200 billion, and their adoption in emerging markets as a store of value and medium of cross-border exchange has been significant in precisely those markets where access to the formal dollar banking system is limited. In the near term, the competitive pressure on China’s cross-border payment ambitions is more likely to originate from dollar-denominated stablecoins than from a government-issued digital dollar.
What the stablecoin framework does not resolve is the surveillance concern that animated the congressional opposition to a government CBDC. The Fourth Amendment arguments deployed against a programmable dollar apply, in modified form, to a regulated stablecoin infrastructure as well: stablecoin issuers are subject to subpoena and regulatory examination, their transaction records are not constitutionally protected in the manner of cash transactions, and the blockchain ledger on which their payments are recorded is, by design, permanently and publicly visible to any party with the technical capacity to read it. The privacy architecture of a regulated stablecoin is not obviously superior to that of a well-designed CBDC subject to statutory privacy protections. And the argument that private stablecoins preserve financial sovereignty deserves scrutiny: they are issued by commercial entities subject to the full range of private commercial incentives, concentrated in a small number of large issuers, and dependent on the same dollar reserve architecture whose efficiency and inclusivity problems a digital dollar was in part designed to address. The choice between a government CBDC and a regulated stablecoin reflects, as much as anything, the particular American preference for private-sector intermediation in monetary affairs rather than a principled resolution of the underlying question.
Three Variables and a Deferred Reckoning
Three developments in the coming three years will determine whether Executive Order 14178 represents a settled American policy choice or a temporary interruption. The first is the progress of the digital euro: if the European Parliament adopts the enabling regulation in 2026, as the ECB’s published timeline projects, and pilot operations begin in 2027, the interoperability and competitive pressures on the United States will intensify in ways that the stablecoin framework alone may not be adequate to address, particularly in wholesale cross-border settlements where the BIS has found wholesale CBDC exploration to be most advanced among developed economy central banks [2]. The second is the performance of the GENIUS Act’s stablecoin regime in practice: whether it succeeds in extending financial access to the 5.6 million unbanked American households [5] that were the strongest inclusion argument for a digital dollar, and whether its privacy architecture proves adequate to the constitutional standards that the anti-CBDC coalition has invoked. The third, and least tractable, is whether the architectural work already completed by Project Hamilton retains its relevance through a subsequent change in administration. The open-source codebase remains available. The technical knowledge within the Federal Reserve’s research community remains intact. The PArSEC architecture for programmable payments exists as published research. The question of whether a democracy should permit a programmable sovereign currency has not been answered; it has only been deferred.
The architects of the Federal Reserve Act of 1913 were motivated, as all architects of monetary systems are, by a combination of efficiency arguments and distributional concerns. The question of who would control the machinery of money, and in whose interest it would be operated, was the determinative question of that debate, not the technical question of how to settle interbank obligations, which was relatively straightforward by comparison. The digital dollar debate presents the same question to a different generation in a more technically complex form, and in a geopolitical environment in which the answer will be observed, studied, and acted upon by 130 other countries currently engaged in their own versions of the same deliberation [2]. An executive order is a sufficient instrument for deferring that question through the remainder of a single administration. It is not a sufficient instrument for resolving it.
- White House. "Executive Order 14178: Strengthening American Leadership in Digital Financial Technology." Federal Register. 23 January 2025. federalregister.gov; see also: Reed Smith LLP. "President Trump signs Executive Order on Digital Assets." Reed Smith Perspectives. February 2025. reedsmith.com; "Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act)." Signed July 2025.
- Bank for International Settlements. "Advancing in Tandem: Results of the 2024 BIS Survey on Central Bank Digital Currencies and Crypto." BIS Papers No. 159. 2024. bis.org
- Federal Reserve Bank of Boston; MIT Digital Currency Initiative. "A High Performance Payment Processing System Designed for Central Bank Digital Currencies." Project Hamilton Phase 1 Executive Summary. February 2022. bostonfed.org; MIT Digital Currency Initiative. "OpenCBDC — PArSEC." dci.mit.edu
- Federal Reserve History. "Federal Reserve Act Signed into Law." Federal Reserve History. federalreservehistory.org
- Congressman Tom Emmer. "Anti-CBDC Surveillance State Act Passes House of Representatives." emmer.house.gov. July 2025. emmer.house.gov; Federal Deposit Insurance Corporation. "2023 FDIC National Survey of Unbanked and Underbanked Households." FDIC. 2023. fdic.gov
- Atlantic Council. "China CBDC." Atlantic Council CBDC Tracker. 2026. atlanticcouncil.org; Lawfare Institute. "The Programmable State: The e-CNY and China’s Quest for Smarter Surveillance." Lawfare. lawfaremedia.org
- European Central Bank. "Eurosystem Moving to Next Phase of Digital Euro Project." ECB Press Release. 30 October 2025. ecb.europa.eu; European Central Bank. "Preparation Phase of a Digital Euro: Closing Report." ECB Digital Euro Progress. October 2025. ecb.europa.eu