US CBDC Development Halted: Why There Won't Be a Digital Dollar Under Trump

The U.S. government has officially stopped working on a digital dollar. Not delayed. Not paused. Stopped. President Donald Trump signed Executive Order 14178 in early 2025, shutting down every federal project related to a central bank digital currency (CBDC). No more research. No more pilots. No FedCoin. The digital dollar is dead - at least for now.

What Was the Digital Dollar Supposed to Be?

The digital dollar, sometimes called FedCoin, wasn’t just a fancy app. It was meant to be a government-backed digital version of the U.S. dollar, issued directly by the Federal Reserve. Unlike Bitcoin or Ethereum, it wouldn’t be decentralized. It would be as real as the cash in your wallet - just digital. You could hold it in a Fed-run wallet, send it instantly to anyone, and it would be backed by the full faith and credit of the United States.

The Biden administration had been pushing hard on this since 2022. Executive Order 14067 called for the highest priority on CBDC research. The Treasury Department formed a team with the Fed, White House, National Security Council, and even the Office of Science and Technology Policy. They were testing how a digital dollar could help with payments, reduce costs, and give the U.S. more control over global finance.

But by 2025, all of that was erased. The new administration didn’t just change direction - it slammed the door.

Why Did the U.S. Stop?

There’s no official white paper explaining the decision, but the clues are clear. The biggest concern? Surveillance.

Right now, U.S. banks file over 26 million reports to the government every year on customer transactions. That’s not just about fraud. It’s about tracking money flows, suspicious activity, and even small purchases that raise red flags. A digital dollar would have made this even easier. Every transaction could be logged, tagged, and monitored in real time.

That’s a scary thought for many Americans. Even if the intention was to fight crime or deliver stimulus faster, the potential for abuse is real. The U.S. already has one of the most intrusive financial surveillance systems in the developed world. Adding a government-controlled digital currency on top of that felt like crossing a line.

Another reason? Political ideology. The new administration favors private innovation over government control. Instead of building a digital dollar, they’re pushing for clearer rules around private stablecoins - digital tokens pegged to the U.S. dollar, issued by companies like Circle or Paxos. The idea is: let the market solve this, not the Fed.

Where Does the U.S. Stand Compared to the Rest of the World?

The U.S. isn’t just behind. It’s alone.

As of 2025, 134 countries are working on CBDCs. That’s up from 114 just two years ago. Fifty-three countries are running live pilots. Eleven have already launched full CBDCs - including Nigeria, Jamaica, the Bahamas, and Zimbabwe. The European Central Bank is deep into its digital euro pilot. China’s digital yuan is already used by millions. Even Turkey and Brazil are moving faster than the U.S. ever did.

The G-20? Nineteen of the world’s largest economies are exploring CBDCs. The U.S. is the only one that’s completely shut down its efforts.

This isn’t just about technology. It’s about power. CBDCs let governments control how money moves. They can program payments - say, send out stimulus only if it’s spent on groceries, not alcohol. They can cut out intermediaries, making cross-border payments faster and cheaper. The Bank for International Settlements says wholesale CBDCs could enable something called “tokenization” - turning assets like real estate or stocks into digital tokens that trade instantly.

The U.S. is opting out of all of that.

What Does This Mean for Businesses and Investors?

For banks and financial firms, the U.S. halt creates a gap.

State Street, one of the world’s biggest asset managers, said having a high-quality digital cash asset is key to scaling institutional interest in digital assets. Right now, institutional investors can’t easily move billions in digital form using a trusted, sovereign currency. They’re stuck with private stablecoins - which are risky. If a company like Tether or Circle goes under, your money might vanish.

One workaround? Fnality International. It’s a private consortium backed by State Street and other big banks. It’s building a system to settle USD transactions on blockchain using digital tokens. It’s not a CBDC. It’s not government-backed. But it’s the closest thing the U.S. will get to one.

The problem? It’s not the same. A CBDC is issued by the Fed. It’s legal tender. It’s the safest form of digital money possible. A private stablecoin? It’s a promise. And promises can break.

Will Private Stablecoins Fill the Void?

Maybe. But they’re not a perfect replacement.

The U.S. government is now focusing on regulating stablecoins instead of creating a CBDC. That means clearer rules, maybe even federal licensing for issuers. But regulation doesn’t equal trust. People still worry about who controls the money behind the token. Is it backed 1:1 with real dollars? Is it audited? What happens if the issuer gets hacked or goes bankrupt?

The Fed’s digital dollar would have solved all of that. It would have been as safe as a bank deposit - but digital, instant, and programmable.

Without it, the U.S. financial system is stuck in the middle. You’ve got cash, you’ve got bank transfers, you’ve got credit cards, and now you’ve got private digital tokens that are fast but risky. It’s messy. It’s inefficient. And it’s not how the rest of the world is building its future.

What’s Next for the U.S.?

The halt doesn’t mean the idea is gone forever. Future administrations could revive it. But for now, the door is closed.

The Federal Reserve Chair, Jerome Powell, has publicly said he won’t issue a CBDC while he’s in office. That’s a strong signal. Even if Congress passed a law tomorrow, the Fed wouldn’t act.

The real question is: what happens when other countries start using CBDCs to settle trade, bypass the dollar, and build new financial networks? If China, the EU, and India are trading in digital yuan, digital euro, and digital rupee - all programmable, all sovereign - will the U.S. dollar still be the world’s reserve currency?

The U.S. is betting that private innovation will win. That companies like Fnality, Circle, and others will build a better system than the government ever could.

It’s a gamble. And right now, the rest of the world is playing a different game.

Why This Matters to You

You might think, “I don’t use crypto. Why should I care?”

Because this isn’t just about crypto. It’s about how money works.

If you ever send money overseas, pay taxes, get government benefits, or use a digital wallet - you’re on the front lines of this shift. The U.S. is choosing a path where your money stays tied to old systems: banks, wires, delays, fees. Other countries are building faster, cheaper, smarter systems.

The digital dollar was supposed to be the U.S. answer to that. Now, the U.S. has no answer at all.

The world is moving forward. The U.S. is standing still.