Now that US President Donald Trump has taken his oath of office, the chances for a US central bank digital currency (CBDC) are all but finished.

Trump has been a vocal opponent of CBDCs, promising on the campaign trail in New Hampshire in 2024 that he would “never allow the creation of a central bank digital currency,” as he claimed it would give the government “absolute control over your money.”

Trump made the promise early on in the campaign — back in January 2024 — but there’s little to suggest that the president has changed his mind. Top picks for Trump’s Cabinet and prominent members of the Republican-controlled Congress have also vocally opposed a CBDC.

However, US lawmakers are still focused on proliferating digital currencies. In the absence of a digital dollar and with significant bipartisan support, stablecoin adoption could see significant growth under the incoming administration.

CBDCs are dead; long live the stablecoin

“CBDC in the US is dead under Trump,” Geoff Kendrick, global head of digital assets research at Standard Chartered, told Cointelegraph. “Instead, they’re going down the private stablecoin route, and the Fed has no control over that.”

Indeed, stablecoin legislation is already making its way through the system. In the House of Representatives, Rep. Patrick McHenry introduced the Clarity for Payment Stablecoins Act of 2023, while in the Senate, Wyoming Republican Senator Cynthia Lummis and New York Democratic Senator Kirsten Gillibrand submitted the Lummis-Gillibrand Payment Stablecoin Act.

These bills would provide regulatory guardrails that the industry has been saying it needs in order to succeed.

Related: Pro-Bitcoin lawmakers pack Congress as partisan gridlock looms

Some have suggested the industry could see new stablecoin regulations soon , as it would be a quick win for representatives on both sides of the aisle, who will need to defend their seats again in 2026.

Kendrick said, “I think, under Trump, you’ll get passage in the next few months of a stablecoin bill that creates regulation. You’ll then probably get more TradFi players issuing stablecoins in the US [...] and you’ll also get more surety behind the two largest stablecoins, Tether and USDC.”

The pivot to private stablecoins can be explained by two important factors: the clear privacy concerns surrounding CBDCs and the fact that central banks are having a hard time convincing the public of their benefits.

CBDCs raise concerns about privacy and government oversight

Reuters and The Washington Post have reported that the Trump administration is planning mass dismissals of federal employees, paving the way for them to be replaced by appointees loyal to the administration.

Administration spokesperson Brian Hughes told Reuters, “The Trump Administration will have a place for people serving in government who are committed to defending the rights of the American people, putting America first, and ensuring the best use of working men and women’s tax dollars.”

This rhetoric fits into the wider Republican skepticism of government involvement in the financial industry and the desire to deregulate that industry broadly. It comes as no surprise then that CBDCs, which are already a subject of public privacy concerns, should be a target.

John Kiff, a digital currency expert and former senior financial sector expert at the International Monetary Fund, told Cointelegraph that users “want cash-like anonymity and privacy, but central banks are reluctant to offer that as they bend the knee to financial integrity laws and regulations” like Anti-Money Laundering and Countering the Financing of Terrorism laws.

While some CBDC developers, like the European Central Bank, stated that privacy is a top priority , few in the public seem convinced, and it’s stalling CBDC efforts . Of the 169 CBDC projects currently underway, just four have launched , according to CBDC Tracker.

Trump himself suggested that, with a CBDC, the government “could take your money, and you wouldn’t even know it was gone.”

Indeed, much of Trump’s campaign contained scathing invective about a government “deep state” controlling Americans’ lives and limiting their freedom from behind the scenes.

Trump and the Republicans are unlikely to budge on this issue, said Kiff. “To me, most of the [Republican] objections to a retail CBDC are based on the ‘slippery slope’ concept. So, even if a current version of a retail CBDC were to be completely private and free of any potential government control, future governments could ‘weaponize’ it against users.”

Who needs a CBDC?

Central banks have been studying CBDCs for several years now and have found that there are clear advantages.

Kiff said, “Purported benefits are related to such things as increasing financial inclusion and reducing the costs to users and merchants of transactions.”

Despite these benefits, central banks are having a hard time communicating them. Kiff said this is for several reasons. First, in most developed countries, there are already fast and relatively easy payment options like “credit/debit cards, fintech platforms [...] fast payment systems.”

Trump’s own Cabinet pick for Treasury Secretary, Scott Bessent, said in a Jan. 16 hearing of the US Senate Committee on Finance:

“I see no reason for the US to have a central bank digital currency. In my mind, a central bank digital currency is for countries who have no other investment alternatives. [...] Many of these countries are doing it out of necessity, whereas the US — if you hold US dollars — you can hold a variety of very secure US assets.”

This means that “to gain traction, retail CBDC have to add something beyond what’s already out there. That could be lower, or no, fees to merchants, but that’s one of those indirect benefits to users that’s hard to market,” said Kiff.

He added, “Retail CBDC is not the only way to achieve these benefits. Other options include central bank reserve-backed stablecoins and tokenized deposits.”

The future of CBDCs

While it’s clear that any conception of a “digital dollar” is on ice, other major economies are likely to continue their CBDC development plans. China’s digital yuan is already seeing limited use, while the European Central Bank is continuing its cautious but optimistic roadmap for a digital euro.

This may not ring true everywhere. Kendrick said that Trump’s negative opinion of CBDCs “probably just means that CBDCs don’t take off globally as much as they otherwise may have done” and that smaller economies may scrap their projects.

Some industry observers believe Trump’s position could hurt US competitiveness, saying it’s critical that the US allocate more resources to developing a CBDC so as not to fall behind.

But Kiff said, “I’ve never understood these arguments as they pertain to retail CBDC. I do think it’s important that the US stay at the forefront of wholesale CBDC developments, particularly those aimed at reducing costs and frictions in cross-border payments. That being said, wholesale CBDC is only just one option in this regard, but the Fed shouldn’t be handcuffed from exploring all options.”