US CBDC Development Halt - No Digital Dollar Under Trump’s Executive Order 14178

US CBDC Development Halt - No Digital Dollar Under Trump’s Executive Order 14178

TL;DR

• Executive Order 14178 signed by President Donald Trump ends all US government work on a digital dollar (FedCoin).
• The Federal Reserve, led by Jerome Powell, now rules out any CBDC while he remains chair.
• Globally, 134 countries are still pushing ahead - the US is now the odd one out.
• Private‑sector projects like Fnality aim to fill the gap left by the policy reversal.
• The halt raises questions about US competitiveness, financial‑surveillance concerns, and future regulation of stablecoins.

What the US Was Doing Before the Halt

US CBDC is a central bank digital currency initiative that the United States was researching before being halted by Executive Order 14178 under the Biden administration. In 2022 President Joe Biden issued Executive Order 14067, calling for “the highest urgency” in exploring a digital dollar, often referred to as FedCoin. The Federal Reserve set up multiple pilots, testing everything from retail‑use prototypes to wholesale settlement on distributed‑ledger technology.

To coordinate the effort, the Treasury launched an inter‑agency working group in March 2023. Treasury Inter‑Agency Working Group brought together officials from the Treasury, Federal Reserve, White House, Council of Economic Advisors, National Economic Council, National Security Council, and Office of Science and Technology Policy to shape design choices, international standards, and privacy safeguards.

The Trump Reversal: Executive Order 14178

When Donald Trump took office in January 2025, one of his first moves was to sign Executive Order 14178 an order that officially ends all federal research, development, and pilot activities related to a US central bank digital currency. The order cites concerns over financial surveillance, fiscal policy overreach, and the desire to let the private sector lead digital‑money innovation.

Within days of the order, the Federal Reserve’s CBDC task force was dissolved, and all contracts with fintech partners were terminated. The move marked a dramatic policy swing from the previous administration’s enthusiastic push.

Jerome Powell’s New Stance

Federal Reserve Chair Jerome Powell the current chair of the US central bank, who has overseen multiple CBDC pilots publicly pledged that he will not issue a CBDC as long as he remains in office. Powell argued that the Fed’s primary mandate - price stability and maximum employment - does not require a digital currency and that existing payment systems can be modernized without a sovereign token.

How the Rest of the World Is Moving

While the United States stepped back, the global momentum kept accelerating. By early 2025, 134 countries and currency unions were engaged in some form of CBDC work, up from 114 in 2023. Seventy‑two nations were in advanced stages - pilots, development, or full launch - and 53 were actively running pilots. The total value of CBDC transactions worldwide was projected at $213billion in 2025, more than double the $100billion seen two years earlier.

In the G‑20, 19 members are exploring CBDCs and 16 have moved into development or pilot phases. The United Kingdom, Germany, and Mexico are deep in development, while Argentina and Canada are still in early exploration - the US now sits in the “no‑go” category.

The European Central Bank, for example, is pushing ahead with its wholesale CBDC initiative. Digital Euro the European Central Bank’s retail‑focused CBDC project currently in pilot testing across 27 jurisdictions aims to settle DLT‑based transactions using central‑bank money, even though only about one‑third of Europeans say they would actually use it.

Industry Reaction: Private‑Sector Gaps and Opportunities

Financial‑services giant State Street a leading custodian bank that supports institutional investors and digital‑asset services warned that a high‑credit, sovereign digital cash asset would be crucial for scaling institutional interest in tokenized assets. With the US abandoning its own CBDC, the firm sees a role for private‑sector solutions.

One such effort is Fnality International a consortium of banks and fintech firms developing a wholesale digital currency bridge for the US dollar. Fnality aims to provide a USD‑backed digital token that can settle cross‑border payments on DLT, essentially filling the void left by the policy shift.

These private initiatives could reshape the US digital‑money landscape, but they also raise regulatory questions. The new administration is emphasizing clear rules for stablecoins and other private digital assets while explicitly rejecting sovereign alternatives.

Geopolitical and Competitive Implications

The United States has long set standards for global finance. By stepping away from a digital dollar, it risks ceding influence over emerging digital‑payment protocols. The Bank for International Settlements an international organization that supports central banks and monitors global monetary developments has noted that wholesale CBDCs could bring programmability, composability, and tokenization to future financial systems - capabilities the US will now rely on private actors to deliver.

Meanwhile, China’s digital yuan continues to expand, and the European Union’s digital euro pushes ahead. If the US remains silent, it may find itself forced to adapt to standards shaped elsewhere, potentially limiting its ability to enforce anti‑money‑laundering rules or protect its monetary sovereignty.

Civil Liberties and Surveillance Concerns

One of the less‑talked‑about drivers behind the halt is the existing surveillance regime. In 2022, US banks filed over 26million reports to the government on customer activity. Critics argue that a digital dollar could amplify these capabilities, making every transaction traceable in real time.

While the US still scores a 7.35/10 on Liberal Democracy indices, civil‑liberty groups have flagged the financial‑sector monitoring as a major risk. The executive order’s language reflects a desire to avoid deeper state‑level oversight of everyday payments.

Regulatory Landscape for Private Digital Assets

With the federal CBDC road blocked, Congress and regulators are turning their attention to stablecoins and other private digital tokens. Tight deadlines have been set for the Treasury and the Securities and Exchange Commission to issue guidance on consumer protection, AML/KYC, and systemic‑risk oversight.

Legislators are also considering bills that would give stablecoin issuers a clearer charter, borrowing concepts from the earlier “Digital Asset Market Innovation Act”. If passed, these measures could create a robust private‑sector framework that substitutes for a sovereign digital dollar.

What’s Next for the US and the Global CBDC Ecosystem?

In the short term, the United States will watch how private‑sector solutions like Fnality perform and whether they can achieve the same level of trust and liquidity as a central‑bank‑issued token. Long‑term, the policy choice could shape whether the US remains a leader in setting digital‑currency standards or becomes a follower adapting to external designs.

For other countries, the US retreat serves as a cautionary tale: aligning CBDC projects with domestic legal, political, and civil‑rights environments is essential. The global trend shows no sign of slowing - more pilots, more cross‑border collaborations, and larger transaction volumes year after year.

Whether the US eventually circles back to a digital dollar will depend on political shifts, market pressure from private tokens, and the international community’s appetite for a sovereign US digital asset.

Frequently Asked Questions

Why did President Trump halt the US CBDC project?

Executive Order 14178 cites concerns over financial surveillance, fiscal‑policy overreach, and a belief that the private sector should lead digital‑money innovation. The administration wants to avoid expanding government monitoring capabilities inherent in a digital currency.

What is the current stance of the Federal Reserve on a digital dollar?

Chair Jerome Powell has publicly pledged not to issue a CBDC while he remains chair, arguing that the Fed’s existing tools and payment‑system upgrades are sufficient for its mandates.

How does the US halt compare to global CBDC activity?

While the US steps back, 134 countries are still exploring or piloting CBDCs. Seventy‑two are in advanced stages, and 53 run active pilots. The US is now an outlier among major economies, especially within the G‑20.

Can private‑sector projects replace a digital dollar?

Initiatives like Fnality International aim to create a USD‑backed token for wholesale settlement. While promising, they still need regulatory clarity, widespread adoption, and the trust that only a central bank can provide.

What are the privacy implications of a US CBDC?

A government‑issued digital currency would allow real‑time transaction tracking, potentially expanding the already extensive reporting requirements that generated over 26million AML reports in 2022.