Published by NCIA’s Banking & Financial Services Committee (BFSC)

Executive Summary

A potential U.S. Central Bank Digital Currency (CBDC) represents one of the most disruptive technologies on the horizon for the financial world, with profound implications for the cannabis industry. While a “digital dollar” could theoretically solve the industry’s payment rail issues overnight, it also introduces significant threats related to privacy, data security, and direct federal oversight, creating a high-stakes dilemma for cannabis businesses and the institutions that bank them. However, recent developments have fundamentally altered this landscape, particularly the January 2025 Executive Order 14178 halting U.S. CBDC development and ongoing progress with cannabis banking legislation.

Current State Analysis

The conversation around a U.S. CBDC has evolved dramatically from academic theory to active research, most notably through the Federal Reserve’s collaboration with MIT on “Project Hamilton,” which completed its Phase 1 research in February 2022. However, in January 2025, President Trump issued Executive Order 14178, explicitly prohibiting federal agencies from “undertaking any action to establish, issue, or promote a CBDC” and revoking previous digital asset policies. This makes the United States the only major economy to halt CBDC development through executive action. Despite this policy shift, understanding the potential impacts of CBDCs remains relevant, as policy positions can change with administrations, and other countries continue rapid CBDC development that could influence global financial systems. For the cannabis industry, banking challenges persist despite the executive order. The core issue remains the industry’s reliance on private-sector workarounds. Fintechs and banks have invested heavily in BSA/AML programs to manage the risks of handling cash deposits.

Legislative Developments

Simultaneously, significant progress has occurred with cannabis banking legislation. The SAFE Banking Act evolved into the SAFER Banking Act (S.2860), which passed the Senate Banking Committee with a bipartisan 14-9 vote and awaits a Senate floor vote. This legislation would provide safe harbor protections to financial institutions serving state-legal cannabis businesses, potentially resolving many banking challenges independent of any CBDC considerations. Additionally, cannabis rescheduling efforts at the federal level could fundamentally alter banking access. While rescheduling alone wouldn’t resolve all banking issues, it would reduce regulatory burden and risk perception for financial institutions considering cannabis banking services.

Regulatory Landscape

The introduction of a CBDC, if policy were to reverse, would create a direct and unavoidable conflict with the Controlled Substances Act (CSA). Every transaction involving a CBDC would be recorded on a central ledger managed by the Federal Reserve, raising critical policy questions about privacy versus surveillance. The Federal Reserve’s previous white papers presented various models, from anonymous, token-based systems (similar to cash) to account-based systems that would link every transaction to a verified identity. If the U.S. were to adopt an identity-based CBDC in the future, the federal government would have a real- time, unalterable record of every dollar spent at every state-licensed dispensary in the country.

Alternative Pathways

With CBDC development currently halted, the cannabis industry must focus on alternative pathways to banking normalization:

1. Legislative Solutions: Continued advocacy for the SAFER Banking Act and similar legislation that would enable traditional banking services.

2. Existing Compliance Frameworks: Further investment in robust compliance programs under current FinCEN guidance, which remains relevant despite policy shifts.

3. Private Sector Innovation: Development of alternative payment solutions that can operate within current regulatory frameworks.

4. State-Level Banking Solutions: Some states are exploring state-chartered banking options specifically for cannabis businesses.

Key Takeaways

• The January 2025 Executive Order significantly altered the U.S. CBDC landscape but hasn’t resolved cannabis banking challenges

• The SAFER Banking Act represents the most immediate potential solution for cannabis banking issues

• Banks should continue investing in current compliance technologies rather than waiting for CBDC or legislative solutions

• The cannabis industry must actively engage with multiple parallel policy debates that impact banking access

• Privacy concerns remain central to any digital payment solution for the cannabis industry, whether government or privately issued

• Cannabis rescheduling efforts represent another potential pathway to improved banking access independent of payment technology development