A new bill introduced this week would allow any company to issue fully-backed digital dollars, provided they hold 100% reserves in U.S. dollars or equivalent assets. That means no lending against deposits. No fractional reserve. No money creation through leverage. Just one-to-one backing. The bill is short. The implications are not.
The proposal is gaining traction among monetary reformers and digital asset advocates. Economist Peter St. Onge flagged the bill on June 24, calling it “a direct challenge to the Fed’s monopoly on money creation.” The legislation would legalize private stablecoins that are pegged to the dollar but not created through traditional banking channels. That includes firms like PayPal, Stripe, and yes, Elon Musk’s X Payments. If passed, any of them could issue their own fully-backed digital dollars.
A new bill would allow any company — including Elon Musk — to issue fully-backed dollars.
It blows a hole in fractional reserve banking.
Which is the main driver of inflation.
And it obliterates the case for a government-run crypto — a CBDC. pic.twitter.com/8q1glpHiHU
— Peter St Onge, Ph.D. (@profstonge) June 24, 2025
Fractional reserve banking has been the engine of inflation for over a century. Banks take in deposits, lend out most of it, and keep a sliver in reserve. That process multiplies the money supply. It also creates systemic risk. When too many depositors want their money back at once, the system buckles. The 2008 crisis was not a fluke. It was a feature. This bill would sidestep that model entirely. No leverage. No risk. Just digital cash backed by real dollars.
The Federal Reserve is watching. The central bank has not committed to launching a CBDC. It says it would require congressional approval. But the Fed has been running pilot programs and publishing white papers for years. The goal is clear. A government-run digital dollar would give the Fed direct control over retail money. That means programmable currency. That means surveillance. That means control. This bill cuts that off at the knees.
If private firms can issue fully-backed dollars, the case for a CBDC collapses. There is no need for a government-run alternative if the market can provide a safer, more transparent version. The bill does not ban CBDCs. It just makes them irrelevant.
The inflation angle is not subtle. Fully-backed dollars cannot be multiplied. They cannot be lent into existence. They cannot be inflated away. That is the point. The bill would not just legalize private money. It would put a cap on the Fed’s ability to expand the money supply. That is not a tweak. That is a reset.
The legislation is still in committee. No vote has been scheduled. But the conversation has started. The Fed’s monopoly is no longer assumed. The dollar is no longer untouchable. And the future of money may not come from Washington.
Sources:
https://www.siliconinvestor.com/readmsg.aspx?msgid=35175691
https://www.federalreserve.gov/cbdc-faqs.htm
https://survivalblog.com/2025/04/06/fractional-reserve-banking-the-global-fraud-syndicate/