United States
U.S. financial repression works mostly through bank and fund regulation that favors Treasuries: zero risk weights, Level 1 liquidity status, government money-fund carve-outs and, since 2025, stablecoin reserve rules. The Fed ended balance-sheet runoff in December 2025 and resumed T-bill purchases for reserve management, and the leverage ratio was eased from April 2026. Capital controls are light, and rent caps exist at state and city level.
- 15 in force
- 1 enacted
- 4 proposed or under discussion
Measures as of
How the index is built
Each segment is what one category of rules, or the market pillar, adds to the index. The full bar is 100.
- Captive demand 3.2
- Central bank financing 9.6
- Capital controls 10.4
- Rate caps 0.0
- Prudential sovereign bias 7.0
- Directed credit 0.0
- Tax incentives 2.5
- Real asset restrictions 3.3
- Transaction taxes 0.0
- Market pillar 7.0
Index = 80% × rules (44.9) + 20% × market (35.0) = 42.9
The method in plain words
- Rules pillar (0–100). Each of the 9 categories can add up to its weight (the weights sum to 100). A category's intensity grows with every in-force measure in it: one measure counts by its severity factor (0.25 for severity 1, 0.5 for 2, 0.8 for 3), and each further measure closes part of the remaining gap, so breadth adds with diminishing returns: two severity-3 measures give 96%.
- Market pillar (0–100). The average of the market readings below: how negative the real policy rate is, and how much of the government's debt is held by its own central bank and banks.
- Index. 80% rules + 20% market when market data exists, otherwise rules alone. Laws passed but not yet applying count only in the outlook; proposals never count.
The 9 categories
Weight = the most points a category can add to the rules pillar. Intensity = how much of that weight the in-force measures fill. Open a category to see the measures counted; “What is this?” shows the instruments behind it, worldwide and in history.
- 1 enacted, 2 proposed not countedWeight 16Intensity 25%Points 3.2 → 10.9 once enacted laws apply
Mandated holdings of government debt by pension funds, insurers or banks. What is this? →
Captive demand: measures counted in the index Measure counted Severity Factor Points 1 of 3 0.25 3.2 - Weight 16Intensity 75%Points 9.6
Central bank purchases of government debt, yield curve control, direct monetary financing. What is this? →
Central bank financing: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 4.8 2 of 3 0.5 4.8 - Weight 16Intensity 81%Points 10.4
Limits on moving money abroad, outbound investment limits, FX controls. What is this? →
Capital controls: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 4.3 2 of 3 0.5 4.3 1 of 3 0.25 1.8 - Rate capsWeight 14Intensity 0%Points 0.0
Caps or ceilings on deposit or lending rates, and administered interest rates. No in-force measures here. What is this? →
- Weight 10Intensity 88%Points 7.0
Prudential rules that favor sovereign debt (zero risk weights, liquidity-buffer rules, leverage-ratio exemptions). What is this? →
Prudential sovereign bias: measures counted in the index Measure counted Severity Factor Points 2 of 3 0.5 2.3 2 of 3 0.5 2.3 2 of 3 0.5 2.3 - Directed creditWeight 10Intensity 0%Points 0.0
State-directed lending, credit guidance, and mandates to invest domestically or in state priorities. No in-force measures here. What is this? →
- 1 proposed not countedWeight 7Intensity 44%Points 2.5
Tax privileges for government bonds, or tax penalties on competing assets. What is this? →
Tax incentives: measures counted in the index Measure counted Severity Factor Points 1 of 3 0.25 1.2 1 of 3 0.25 1.2 - Weight 6Intensity 68%Points 3.3
Rent controls, property curbs, and limits on owning gold, cash or crypto. What is this? →
Real asset restrictions: measures counted in the index Measure counted Severity Factor Points 1 of 3 0.25 0.8 1 of 3 0.25 0.8 1 of 3 0.25 0.8 1 of 3 0.25 0.8 - Transaction taxes1 proposed not countedWeight 5Intensity 0%Points 0.0
Financial transaction taxes, stamp duties and similar levies on non-government assets. No in-force measures here. What is this? →
Market pillar 35.0 / 100
The average of the readings that have data, worth 20% of the index (7.0 points here).
Real policy rate
25.3 / 1000.2% · Aug 2026
Policy rate minus inflation. A real rate of +2% or more scores 0; −5% or less scores 100; in between it scales in a straight line. Savers lose most when it is deeply negative.
Policy rate 3.625% minus consumer price inflation 3.397% (year on year), 2026-08.
Debt held by the central bank and domestic banks
44.7 / 10026.8% of government debt · 2025-Q4
Share of government debt held by the domestic central bank and domestic banks. 0% scores 0; 60% or more scores 100; in between it scales in a straight line.
Central bank 11.67% + domestic banks 15.13% of general government debt, 2025-Q4.
Indicators
Measured data from international sources, alongside the rules above. Real rates below zero mean savers lose purchasing power.
Policy rate, inflation and real rate
Who holds government debt
The liquidation effect follows Reinhart and Sbrancia: with a negative real rate, about −(real rate × debt) of GDP moves from savers to the state each year. It uses the policy rate, so treat it as a rough guide. Sources: BIS, BIS central bank policy rates; BIS consumer prices; IMF, IMF DataMapper: World Economic Outlook (October 2026); Fiscal Monitor (October 2026); Menzie D. Chinn and Hiro Ito, The Chinn-Ito Index (KAOPEN): a de jure measure of financial openness; IMF, Sovereign Debt Investor Base for Advanced Economies / for Emerging Markets and Developing Economies (Arslanalp and Tsuda).
Measures
Every measure tracked here, with its legal basis and sources. Only in-force measures count in the index.
In force (15)
New York City rent freeze on stabilized apartments
Adds 0.8 points to the index
On 25 June 2026 the NYC Rent Guidelines Board voted to freeze rents on one- and two-year leases for about one million rent-stabilized apartments, for leases starting from 1 October 2026. It was the first freeze since the pandemic and the first to cover two-year leases.
Why it counts: A nominal freeze while prices rise cuts real rental income for owners of regulated housing.
Legal basis NYC Rent Guidelines Board, 2026 Apartment & Loft Order #58 (adopted under the Rent Stabilization Law of 1969 and the Emergency Tenant Protection Act of 1974), Adjustment for leases (apartments)
NYC Rent Guidelines Board, 2026 Apartment & Loft Order #58 (adopted under the Rent Stabilization Law of 1969 and the Emergency Tenant Protection Act of 1974), Adjustment for leases (apartments)Primary source
“For a two-year lease commencing on or after October 1, 2026 and on or before September 30, 2027: 0%”
Enhanced supplementary leverage ratio recalibrated
Adds 2.3 points to the index
The Fed, FDIC and OCC finalized a rule on 25 November 2025 that replaces the fixed 2% eSLR buffer for GSIB holding companies with half of each firm's method 1 GSIB surcharge, with bank subsidiaries' buffer capped at 1%. It took effect on 1 April 2026, with optional early adoption from 1 January 2026. The rule recalibrates the ratio rather than excluding Treasuries outright, a carve-out that officials, including the Treasury Secretary, have publicly discussed.
Why it counts: A less binding leverage ratio lowers the capital cost of holding and dealing in low-risk-weight assets like Treasuries, so large banks can absorb more government debt.
Legal basis Regulatory Capital Rule: Modifications to the Enhanced Supplementary Leverage Ratio Standards for U.S. GSIB Holding Companies and Their Subsidiary Depository Institutions (final rule published in the Federal Register 1 Dec 2025; eCFR cites 90 FR 55289), codified in 12 CFR Part 217, 12 CFR 217.11(a)(2)(v) and 1 more
Regulatory Capital Rule: Modifications to the Enhanced Supplementary Leverage Ratio Standards for U.S. GSIB Holding Companies and Their Subsidiary Depository Institutions (final rule published in the Federal Register 1 Dec 2025; eCFR cites 90 FR 55289), codified in 12 CFR Part 217, 12 CFR 217.11(a)(2)(v)Primary source
“A global systemically important BHC's leverage buffer requirement is 50 percent of the most recent method 1 surcharge (expressed as a percentage)”
Federal Reserve press release: Agencies issue final rule to modify certain regulatory capital standards (eSLR)Primary source
“The final rule will take effect on April 1, 2026. Banking organizations may elect to adopt the modified standards beginning January 1, 2026.”
Fed reserve management purchases of Treasury bills
Adds 4.8 points to the index
From 12 December 2025 the New York Fed began buying Treasury bills (and, if needed, securities up to three years) to keep reserves ample, at about $40 billion a month. The pace was cut to about $25 billion in mid-April 2026 and $10 billion a month from mid-May, and the Desk has scheduled no reserve management purchases since 14 August 2026, although the FOMC directive remains in place.
Why it counts: The central bank again adds Treasury securities to its balance sheet, financing part of the government's short-term borrowing with reserves.
Legal basis Implementation Note issued December 10, 2025 (domestic policy directive to the Federal Reserve Bank of New York) and 1 more
Implementation Note issued December 10, 2025 (domestic policy directive to the Federal Reserve Bank of New York)Primary source
“Increase the System Open Market Account holdings of securities through purchases of Treasury bills and, if needed, other Treasury securities with remaining maturities of 3 years or less to maintain an ample level of reserves.”
Statement Regarding Reserve Management Purchases OperationsPrimary source
“The Desk plans to release the first schedule on December 11, 2025, with a total amount of RMPs of approximately $40 billion in Treasury bills; purchases will start on December 12, 2025.”
Fed ends balance-sheet runoff and reinvests into T-bills
Adds 4.8 points to the index
The FOMC decided on 29 October 2025 to end the reduction of its securities holdings from 1 December 2025. All maturing Treasuries are rolled over at auction and all principal payments from agency MBS are reinvested into Treasury bills.
Why it counts: The Fed stops shrinking its holdings and redirects mortgage runoff into government bills, keeping a large central-bank holding of Treasury debt.
Legal basis FOMC statement, 29 October 2025 and 1 more
FOMC statement, 29 October 2025Primary source
“The Committee decided to conclude the reduction of its aggregate securities holdings on December 1.”
Implementation Note issued October 29, 2025 (domestic policy directive to the Federal Reserve Bank of New York)Primary source
“Beginning on December 1, reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills.”
Washington State rent stabilization (HB 1217)
Adds 0.8 points to the index
Washington's HB 1217, signed in May 2025, caps annual rent increases at 7% plus CPI or 10%, whichever is lower, until July 2040, with a 5% cap for manufactured homes. New construction (12 years), public and tax-credit housing, and owner-occupied single-family homes and small multiplexes not owned by REITs or corporations are exempt.
Why it counts: Statewide caps limit landlords' ability to pass inflation through to rents, lowering the real return on rental property.
Legal basis Engrossed House Bill 1217, Chapter 209, Laws of 2025 (session law), Sec. 101(1)(a)(ii) (new section in chapter 59.18 RCW)
Engrossed House Bill 1217, Chapter 209, Laws of 2025 (session law), Sec. 101(1)(a)(ii) (new section in chapter 59.18 RCW)Primary source
“During any 12-month period of the tenancy, in an amount greater than seven percent plus the consumer price index, or 10 percent, whichever is less.”
Outbound investment rules for China (OISP and COINS Act)
Adds 1.8 points to the index
Treasury's Outbound Investment Security Program, effective 2 January 2025, bans or requires notice of U.S. investments in Chinese, Hong Kong and Macau firms in semiconductors, quantum and AI. The COINS Act in the FY2026 NDAA (December 2025) put the program into statute, widening countries of concern to include Cuba, Iran, North Korea, Russia and Maduro-regime Venezuela and adding high-performance computing and hypersonics, to be applied through new Treasury rules replacing Part 850.
Why it counts: It bars or limits some foreign investment options for U.S. capital; the aim is national security, but the effect is a narrower set of places to invest abroad.
Legal basis Provisions Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries of Concern, 31 CFR Part 850 (final rule, 89 FR 90462, 15 Nov 2024; implementing Executive Order 14105), 31 CFR 850.101 and 1 more
Provisions Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries of Concern, 31 CFR Part 850 (final rule, 89 FR 90462, 15 Nov 2024; implementing Executive Order 14105), 31 CFR 850.101Primary source
“regulations that require U.S. persons to provide notification of information relative to certain transactions involving covered foreign persons and that prohibit U.S. persons from engaging in certain other transactions involving covered foreign persons”
National Defense Authorization Act for Fiscal Year 2026 (S. 1071, enrolled), Title LXXXV: Comprehensive Outbound Investment National Security Act of 2025 (COINS Act), adding Title VIII to the Defense Production Act of 1950, Section 8521 (new DPA section 801(a))Primary source
“The Secretary may prohibit, in accordance with regulations issued under subsection (e), a United States person, including its controlled foreign entities, from knowingly engaging in a covered national security transaction in any prohibited technology.”
Broker reporting of crypto sales on Form 1099-DA
Adds 4.3 points to the index
Final Treasury regulations under IRC 6045 require custodial digital-asset brokers to report customers' gross proceeds on the new Form 1099-DA for sales on or after 1 January 2025, with cost-basis reporting for assets acquired in a custodial account from 1 January 2026. The only de minimis thresholds are reporting ones: brokers may report qualifying stablecoin sales in aggregate only above $10,000 a year per customer, and payment-processor sales only above $600. A separate rule extending broker reporting to decentralized-finance front ends was annulled by Congress in April 2025 (Public Law 119-5).
Why it counts: Third-party reporting ties crypto holdings at U.S. platforms to taxpayer identities and lets the IRS match every sale, reducing the scope to hold crypto outside the tax net and pushing users who want privacy toward self-custody or foreign platforms.
Legal basis 26 CFR 1.6045-1 (Treasury Regulations, returns of information of brokers), Applicability date for digital asset gross proceeds reporting and 3 more
26 CFR 1.6045-1 (Treasury Regulations, returns of information of brokers), Applicability date for digital asset gross proceeds reportingPrimary source
“A broker is not required to report the gross proceeds from the sale of a digital asset as described in paragraph (a)(9)(ii) of this section if the sale is effected prior to January 1, 2025.”
26 CFR 1.6045-1, Paragraph (d)(10)(i), optional reporting method for qualifying stablecoinsPrimary source
“If a customer's aggregate gross proceeds (after reduction for the allocable digital asset transaction costs) from all designated sales effected by that broker of qualifying stablecoins exceed $10,000 for the year”
IRS guidance page: Digital assets, Broker compliancePrimary source
“This reporting is required to be made on Form 1099-DA beginning with transactions on or after Jan. 1, 2025.”
Public Law 119-5 (H.J. Res. 25), Congressional disapproval of the DeFi broker rulePrimary source
“Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales'' (89 Fed. Reg. 106928 (December 30, 2024)), and such rule shall have no force or effect.”
Money market fund reform favors government funds
Adds 3.2 points to the index
SEC reforms adopted in July 2023 impose mandatory liquidity fees on institutional prime and institutional tax-exempt money market funds when daily net redemptions exceed 5% (from 2 October 2024), and raise liquidity minimums to 25% daily (not for tax-exempt funds) and 50% weekly. Government money market funds are exempt from the mandatory fee.
Why it counts: Making prime funds costlier and less convenient pushes cash toward government money funds, which invest almost entirely in Treasuries and government-backed repo.
Legal basis Rule 2a-7 under the Investment Company Act of 1940 (17 CFR 270.2a-7), as amended by Money Market Fund Reforms (final rule, Federal Register 3 Aug 2023; eCFR cites 88 FR 51521), 17 CFR 270.2a-7(c)(2)(ii) and 1 more
Rule 2a-7 under the Investment Company Act of 1940 (17 CFR 270.2a-7), as amended by Money Market Fund Reforms (final rule, Federal Register 3 Aug 2023; eCFR cites 88 FR 51521), 17 CFR 270.2a-7(c)(2)(ii)Primary source
“If a money market fund that is not a government money market fund or a retail money market fund has total daily net redemptions that exceed five percent of the fund's net assets”
Rule 2a-7 under the Investment Company Act of 1940 (17 CFR 270.2a-7), 17 CFR 270.2a-7(d)(4)(ii)-(iii)Primary source
“the fund would have invested less than twenty-five percent of its total assets in daily liquid assets. This provision does not apply to tax exempt funds.”
California Tenant Protection Act rent cap
Adds 0.8 points to the index
AB 1482 limits annual rent increases on covered units to 5% plus CPI, with a 10% ceiling. Newer buildings (rolling 15 years) and many single-family homes owned by individuals are exempt, and the cap is set to expire on 1 January 2030 unless extended.
Why it counts: Rent growth is held below what the market would set in high-inflation years, which erodes real returns on rental housing.
Legal basis California Civil Code section 1947.12 (Tenant Protection Act of 2019, AB 1482, Stats. 2019 ch. 597; current version added by Stats. 2023 ch. 290 (SB 567)), Civ. Code 1947.12(a)(1), (d)(4), (o)
California Civil Code section 1947.12 (Tenant Protection Act of 2019, AB 1482, Stats. 2019 ch. 597; current version added by Stats. 2023 ch. 290 (SB 567)), Civ. Code 1947.12(a)(1), (d)(4), (o)Primary source
“increase the gross rental rate for a dwelling or a unit more than 5 percent plus the percentage change in the cost of living, or 10 percent, whichever is lower,”
Oregon statewide rent cap
Adds 0.8 points to the index
Oregon caps annual rent increases at 7% plus CPI or 10%, whichever is lower, with a 6% cap for larger manufactured-home parks and marinas. The maximum is 9.5% for 2026 and 10% for 2027, and buildings less than 15 years old are exempt.
Why it counts: Caps on rent growth limit the inflation protection of rental property, cutting real returns for landlords.
Legal basis ORS 90.324 (Oregon Revised Statutes; rent stabilization enacted by SB 608 (2019), amended by SB 611 (2023)) as applied in DAS notice 'CORRECTION: 2026 Rent Stabilization Percentages', ORS 90.324(1) and 1 more
ORS 90.324 (Oregon Revised Statutes; rent stabilization enacted by SB 608 (2019), amended by SB 611 (2023)) as applied in DAS notice 'CORRECTION: 2026 Rent Stabilization Percentages', ORS 90.324(1)Primary source
“For 2026, the maximum allowable rent increase percentage is 9.5%.”
ORS 90.323 (Maximum rent increase; exemptions), ORS 90.323(5)(a)Primary source
“The first certificate of occupancy for the dwelling unit was issued less than 15 years from the date of the notice of the rent increase; or”
Treasuries count as Level 1 liquid assets in the LCR
Adds 2.3 points to the index
The liquidity coverage ratio requires large banks to hold high-quality liquid assets against 30-day stressed outflows. Reserve balances and Treasury securities qualify as Level 1 assets with no haircut and no cap, while other assets face haircuts and limits.
Why it counts: Banks must keep a large standing buffer, and Treasuries are the main non-cash way to meet it, which builds structural bank demand for government debt.
Legal basis Regulation WW, 12 CFR Part 249 (Liquidity Risk Measurement Standards), 12 CFR 249.20(a)(3) and 1 more
Regulation WW, 12 CFR Part 249 (Liquidity Risk Measurement Standards), 12 CFR 249.20(a)(3)Primary source
“A security that is issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the U.S. Department of the Treasury;”
Regulation WW, 12 CFR Part 249 (Liquidity Risk Measurement Standards), 12 CFR 249.21(b)Primary source
“The level 2A liquid asset amount equals 85 percent of the fair value of all level 2A liquid assets held by the Board-regulated institution as of the calculation date that are eligible HQLA.”
Crypto taxed as property: every disposal is a capital-gains event
Adds 1.2 points to the index
Since IRS Notice 2014-21, digital assets are treated as property, not currency, so every sale, swap or spend of crypto is a taxable disposal. Gains on assets held more than one year are taxed at the long-term rates of 0%, 15% or 20% depending on income, while gains on assets held one year or less are taxed as ordinary income; net capital losses can offset only $3,000 of other income a year. There is no de minimis exemption for small payments, and every federal income tax return asks whether the filer received or disposed of a digital asset.
Why it counts: Treating crypto as property rather than currency makes each everyday payment in bitcoin or other tokens a reportable gain or loss, which taxes and complicates the use of crypto as an alternative money while dollar cash carries no such burden.
Legal basis IRS Notice 2014-21, Section 4, Q&A-1 and 2 more
IRS Notice 2014-21, Section 4, Q&A-1Primary source
“For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.”
IRS guidance page: Digital assets, What's a digital assetPrimary source
“For U.S. tax purposes, digital assets are considered property, not currency.”
IRS Topic no. 409, Capital gains and losses, Limit on the deduction and carryover of lossesPrimary source
“the amount of the excess loss that you can claim to lower your income is the lesser of $3,000 ($1,500 if married filing separately) or your total net loss”
Zero risk weight for U.S. government exposures
Adds 2.3 points to the index
Under the U.S. capital rules' standardized approach, banks assign a 0% risk weight to exposures to the U.S. government, the Federal Reserve and U.S. government agencies, and to the portion of exposures they unconditionally guarantee.
Why it counts: Holding Treasuries uses no risk-based capital, so banks have a regulatory incentive to hold government debt rather than loans or corporate securities.
Legal basis Regulation Q, 12 CFR Part 217 (Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks), 12 CFR 217.32(a)(1)(i)
Regulation Q, 12 CFR Part 217 (Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks), 12 CFR 217.32(a)(1)(i)Primary source
“The portion of an exposure that is directly and unconditionally guaranteed by the U.S. government, its central bank, or a U.S. government agency.”
FBAR and FATCA foreign-account reporting
Adds 4.3 points to the index
U.S. persons must report foreign financial accounts to FinCEN (FBAR, a Bank Secrecy Act requirement dating from 1970) when their combined value exceeds $10,000 at any time in a year, and report specified foreign assets on IRS Form 8938 under FATCA (enacted 2010) above higher thresholds, from $50,000 at year-end or $75,000 at any time for single filers living in the U.S. A foreign account holding only virtual currency is currently not reportable on the FBAR; FinCEN said in Notice 2020-2 (December 2020) that it intends to propose adding virtual currency as a reportable account type, but no such rule has been issued.
Why it counts: Reporting obligations, with heavy penalties for non-filing, make holding wealth abroad visible to U.S. authorities and costly to manage, discouraging savers from moving assets out of the domestic system; the pending FBAR extension would bring crypto held at foreign platforms into the same net.
Legal basis Bank Secrecy Act regulations, 31 CFR Chapter X (implementing 31 U.S.C. 5314), 31 CFR 1010.306(c) (with 1010.350) and 3 more
Bank Secrecy Act regulations, 31 CFR Chapter X (implementing 31 U.S.C. 5314), 31 CFR 1010.306(c) (with 1010.350)Primary source
“shall be filed with FinCEN on or before June 30 of each calendar year with respect to foreign financial accounts exceeding $10,000 maintained during the previous calendar year.”
Income Tax Regulations, 26 CFR 1.6038D-2 (implementing 26 U.S.C. 6038D, added by the HIRE Act 2010), 26 CFR 1.6038D-2(a)(1)Primary source
“to that specified person's annual return for the taxable year to report the information required by section 6038D and § 1.6038D-4 if the aggregate value of all such assets exceeds”
FinCEN Notice 2020-2, Report of Foreign Bank and Financial Accounts (FBAR) Filing Requirement for Virtual Currency, Whole notice (31 CFR 1010.350)Primary source
“For that reason, at this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R. 1010.350 because it holds reportable assets besides virtual currency).”
FinCEN Notice 2020-2, Stated intention to amend 31 CFR 1010.350Primary source
“FinCEN intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account”
Treasury interest exempt from state and local tax
Adds 1.2 points to the index
Federal law, codified at 31 U.S.C. 3124 when Title 31 was re-enacted in 1982, bars states and localities from taxing U.S. government obligations or their interest, apart from certain nondiscriminatory franchise taxes and estate or inheritance taxes.
Why it counts: Savers in high-tax states earn more after tax on Treasuries than on comparable bank deposits or corporate bonds, which tilts demand toward federal debt.
Legal basis 31 U.S.C. 3124 (Exemption from taxation), enacted by Pub. L. 97-258, 31 U.S.C. 3124(a)
31 U.S.C. 3124 (Exemption from taxation), enacted by Pub. L. 97-258, 31 U.S.C. 3124(a)Primary source
“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State.”
Enacted, not yet in force (1)
GENIUS Act: stablecoin reserves in cash and short T-bills, no interest to holders
Counts in the outlook only: adds 9.2 points once it applies
The GENIUS Act (S. 1582), signed on 18 July 2025, requires payment-stablecoin issuers to hold at least one dollar of reserves per coin. Reserves are limited to cash and Fed balances, insured deposits, Treasury bills, notes or bonds maturing within 93 days, short Treasury repos and reverse repos, government money market funds, and other similarly liquid federal assets a regulator approves. Issuers may not pay holders any interest or yield, only permitted issuers may issue payment stablecoins in the United States, and three years after enactment platforms may not offer or sell stablecoins from non-permitted issuers to U.S. persons, while foreign issuers' coins need a comparable-regime determination. The Act takes effect on the earlier of 18 months after enactment (18 January 2027) or 120 days after final implementing regulations; the only final implementing rule found (Treasury, 30 September 2026) would point to a later date, so the requirements apply from 18 January 2027. The ban on platforms offering non-permitted stablecoins applies 3 years after enactment (July 2028).
Why it counts: Forcing stablecoin reserves into cash, deposits and short Treasuries turns every dollar stablecoin into a buyer of government debt, and the interest ban stops issuers passing that Treasury yield to holders, so stablecoins cannot compete with bank deposits on return. The licensing and offer bans shut out unlicensed and non-compliant foreign stablecoins from U.S. platforms.
Legal basis Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), S. 1582 (enrolled bill), Section 4(a)(1)(A) and 5 more
Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), S. 1582 (enrolled bill), Section 4(a)(1)(A)Primary source
“maintain identifiable reserves backing the outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least 1 to 1 basis, with reserves comprising”
Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), S. 1582 (enrolled bill), Section 20 (Effective date)Primary source
“the date that is 18 months after the date of enactment of this Act; or”
Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, S. 1582 (enrolled), Section 4(a)(11), prohibition on interestPrimary source
“No permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration)”
GENIUS Act, S. 1582 (enrolled), Section 3(a)-(b), limitation on issuers and prohibition on offers or salesPrimary source
“It shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States.”
GENIUS Act, S. 1582 (enrolled), Section 3(b)(1)Primary source
“it shall be unlawful for a digital asset service provider to offer or sell a payment stablecoin to a person in the United States, unless the payment stablecoin is issued by a permitted payment stablecoin issuer.”
GENIUS Act, S. 1582 (enrolled), Section 4(a)(1)(A)(iii), reserve assetsPrimary source
“Treasury bills, notes, or bonds-- (I) with a remaining maturity of 93 days or less; or (II) issued with a maturity of 93 days or less;”
Proposed (4)
Digital Asset Tax Certainty Act: wash-sale rule for crypto (H.R. 10357)
Not counted in the index
H.R. 10357, introduced on 14 September 2026 and taken up at a House Ways and Means markup on 16 September 2026, would extend the wash-sale rule (IRC 1091) from stocks and securities to traded digital assets other than qualified U.S. dollar stablecoins, and apply the constructive-sale rules to digital assets. In the other direction it would exempt from gain or loss crypto spent on network or transaction fees of up to $10 and ease the tax treatment of dollar stablecoin transactions.
Why it counts: Applying the wash-sale rule would end crypto investors' ability to sell at a loss and immediately buy back to harvest tax losses, raising the effective tax on holding crypto, while the narrow $10 fee de minimis leaves ordinary crypto payments taxable.
Legal basis H.R. 10357, Digital Asset Tax Certainty Act (119th Congress), as introduced, Table of contents, Title III and 1 more
H.R. 10357, Digital Asset Tax Certainty Act (119th Congress), as introduced, Table of contents, Title IIIPrimary source
“Sec. 301. Application of wash sale rules to traded digital assets. Sec. 302. Application of constructive sale rules to digital assets.”
H.R. 10357, Digital Asset Tax Certainty Act (119th Congress), as introduced, Section 301(b), new IRC 1091(g)Primary source
“The term ‘specified asset’ means— ‘‘(A) any stock or security, and ‘‘(B) any traded digital asset other than a qualified U.S. dollar stablecoin.”
CLARITY Act (H.R. 3633): market structure bill with ban on stablecoin yield via platforms
Not counted in the index
The Digital Asset Market Clarity Act (H.R. 3633) would set up SEC/CFTC registration for crypto trading platforms and intermediaries and, as passed by the House, bar the Fed from issuing a CBDC. The version reported by the Senate Banking Committee on 1 June 2026 adds section 404, which bars crypto platforms and their affiliates from paying U.S. customers any interest or yield for simply holding payment stablecoins or on balances in a way equivalent to bank-deposit interest, allowing only activity-based rewards. On 15 September 2026 the Senate rejected cloture on the motion to proceed 49-50; a motion to reconsider was entered, so the bill is stalled rather than dead.
Why it counts: Extending the GENIUS Act's issuer interest ban to exchanges and affiliates would stop savers earning the T-bill yield behind dollar stablecoins, explicitly to protect bank deposit funding, keeping the private dollar alternative below market returns.
Legal basis H.R. 3633, Digital Asset Market Clarity Act, as reported in the Senate (Calendar No. 423), Section 404(c)(1), prohibition on interest and yield and 2 more
H.R. 3633, Digital Asset Market Clarity Act, as reported in the Senate (Calendar No. 423), Section 404(c)(1), prohibition on interest and yieldPrimary source
“No covered party shall, directly or indirectly, pay any form of interest or yield (whether in cash, tokens, or other consideration) to a restricted recipient-- (A) solely in connection with the holding of the payment stablecoins”
H.R. 3633, as reported in the Senate, Section 404(a)(4), definition of covered partyPrimary source
“The term ``covered party'' means any digital asset service provider, together with all of its affiliates, but in each case excluding any permitted payment stablecoin issuer”
Congressional Record, Daily Digest, 15 September 2026, Senate: Measures Considered, Digital Asset Market Clarity ActPrimary source
“Senate rejected the motion to close further debate on the motion to proceed to consideration of H.R. 3633”
GENIUS Act implementing rules (OCC, FDIC, Treasury)
Not counted in the index
The OCC proposed rules (announced 25 February 2026, published 2 March 2026) to implement the GENIUS Act, including 1:1 segregated reserves limited to assets such as cash, deposits, Treasury bills, notes or bonds with 93 days or less to maturity, certain repos and government money market funds. The FDIC (April 2026), NCUA (May 2026), Treasury (anti-money-laundering and sanctions rules in April 2026, issuance rules in August 2026) and the Federal Reserve (September 2026) issued related proposals.
Why it counts: The rules fix in regulation which assets can back stablecoins, with short Treasury bills at the core, which locks in stablecoin issuers as T-bill buyers.
Legal basis OCC notice of proposed rulemaking: Implementing the GENIUS Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the OCC (91 FR 10202; Docket OCC-2025-0372), Proposed 12 CFR 15.11(b) and 1 more
OCC notice of proposed rulemaking: Implementing the GENIUS Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the OCC (91 FR 10202; Docket OCC-2025-0372), Proposed 12 CFR 15.11(b)Primary source
“Treasury bills, Treasury notes, or Treasury bonds with a remaining maturity of 93 days or less;”
FDIC notice of proposed rulemaking: GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions (91 FR 18534; RIN 3064-AG19)Primary source
“is soliciting comment on a proposal that would implement certain requirements pursuant to the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act)”
Wall Street Tax Act (financial transaction tax bill)
Not counted in the index
Bills in the House (H.R. 4035) and Senate (S. 2127) introduced in June 2025 would tax trades in stocks, bonds and derivatives, phasing in from 0.02% to 0.1%. Both remain in committee.
Why it counts: A tax on each trade would lower the net return on market investments and raise the cost of moving savings between assets.
Legal basis Wall Street Tax Act of 2025, H.R. 4035 (Introduced in House), Section 2 (new IRC section 4475(a)-(b)) and 1 more
Wall Street Tax Act of 2025, H.R. 4035 (Introduced in House), Section 2 (new IRC section 4475(a)-(b))Primary source
“in the case of a covered transaction after December 31, 2025, and before January 1, 2027, 0.02 percent,”
Wall Street Tax Act of 2025, S. 2127 (Introduced in Senate), Section 2 (new IRC section 4475(b)(2)(E))Primary source
“in the case of a covered transaction after December 31, 2029, 0.1 percent.”
Repealed (2)
Unhosted-wallet and crypto-mixing reporting proposals (withdrawn)
Not counted in the index
FinCEN proposed in December 2020 to require banks and money services businesses to keep records, report and verify the identity of counterparties for crypto transfers to or from unhosted (self-custody) wallets, and in October 2023 to impose special reporting on transactions involving international crypto mixing. On 6 October 2026 FinCEN withdrew both proposals and said it will take no further action on the unhosted-wallet rule.
Why it counts: Had they been finalized, the rules would have attached identity checks and reports to moving crypto between regulated platforms and self-custody, and to privacy-enhancing mixing, curbing the use of self-custody to hold savings outside the regulated system. Their withdrawal removes that pending restriction.
Legal basis FinCEN, Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets; Withdrawal (RIN 1506-AB47), 91 FR (6 Oct 2026), Summary and Dates and 1 more
FinCEN, Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets; Withdrawal (RIN 1506-AB47), 91 FR (6 Oct 2026), Summary and DatesPrimary source
“FinCEN will not take any further action on this NPRM. DATES: FinCEN is withdrawing the proposed rule published at 85 FR 83840 (December 23, 2020), as of October 6, 2026.”
FinCEN, Proposal of Special Measure Regarding Convertible Virtual Currency Mixing, as a Class of Transactions of Primary Money Laundering Concern; Withdrawal, SummaryPrimary source
“FinCEN is withdrawing its finding and proposed rulemaking, pursuant to section 311 of the USA PATRIOT Act, that international Convertible Virtual Currency (CVC) mixing is a class of transactions of primary money laundering concern”
Bank-regulator prior approval for crypto activities (rescinded)
Not counted in the index
From 2021 to 2023 the OCC (Interpretive Letter 1179), FDIC (FIL-16-2022) and Federal Reserve (2022 and 2023 supervisory letters) required banks to notify their supervisor, or obtain a supervisory non-objection, before engaging in crypto custody, stablecoin or other crypto-asset activities. The OCC rescinded its letter on 7 March 2025, the FDIC on 28 March 2025 and the Fed on 24 April 2025, so banks may now engage in permissible crypto activities without prior approval.
Why it counts: The prior-approval gates kept banks from offering custody, stablecoin and crypto services and cut crypto firms off from banking channels, making it harder for savers to move between bank money and crypto. Their rescission removes that barrier.
Legal basis OCC Interpretive Letter 1183, OCC Letter Addressing Certain Crypto-Asset Activities, Opening paragraph and 2 more
OCC Interpretive Letter 1183, OCC Letter Addressing Certain Crypto-Asset Activities, Opening paragraphPrimary source
“This letter rescinds Interpretive Letter 1179 (November 18, 2021). This letter also reaffirms that the crypto-asset custody, distributed ledger, and stablecoin activities”
FDIC Financial Institution Letter FIL-7-2025, SummaryPrimary source
“The FDIC is rescinding FIL-16-2022 and providing new guidance to clarify that FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval.”
Federal Reserve Board press release: withdrawal of guidance for banks related to crypto-asset and dollar token activities, Press release textPrimary source
“The Board is rescinding its 2022 supervisory letter establishing an expectation that state member banks provide advance notification of planned or current crypto-asset activities.”
Before today
23 examples from United States in the toolkit, past and present, grouped by what the tool does. Each links to the instrument, its other examples and the cited law.
SteerSteer savings to the state
Captive demand
Mandatory investment of public trust and insurance funds in government securitiesSocial Security Act, 42 U.S.C. 401(d)
1935 → nowIn forceCaptive demand
Voluntary war-bond drives and patriotic savings campaigns (moral suasion)Series E Defense/War Savings Bonds and the Treasury's national volunteer sales programme (with the Payroll Savings Plan)
1941 → 1945HistoricalCaptive demand
Mandatory investment of public trust and insurance funds in government securitiesFederal Deposit Insurance Act, 12 U.S.C. 1823(a)
1950 → nowIn force- 1954 → nowIn force
Prudential sovereign bias
Zero risk weights for sovereign exposures12 CFR 217.32(a)(1) (Federal Reserve Regulation Q, standardized approach)
2013 → nowIn forcePrudential sovereign bias
Liquidity Coverage Ratio Level 1 treatment of government bonds12 CFR 249.20(a) (Regulation WW, high-quality liquid asset criteria)
2014 → nowIn forcePrudential sovereign bias
Money-market-fund reforms favouring government-debt fundsSEC Money Market Fund Reform; Amendments to Form PF, 79 FR 47736 (14 August 2014), amending Rule 2a-7
2016 → nowIn forcePrudential sovereign bias
Leverage-ratio exclusions for government securities and central-bank reservesFederal Reserve interim final rule, Temporary Exclusion of U.S. Treasury Securities and Deposits at Federal Reserve Banks From the Supplementary Leverage Ratio, 85 FR 20578 (14 April 2020)
2020 → 2021HistoricalPrudential sovereign bias
Stablecoin reserve rules requiring short government debtGENIUS Act (S. 1582, 119th Congress, enrolled), section 4(a)(1)(A)
takes effect 2027Enacted, not yet in force
HoldHold the price of money down
- 1933 → 1986Historical
Rate caps
Prohibition of interest on current accountsFederal Reserve Act section 19(i), added by Banking Act of 1933 section 11; Regulation Q
1933 → 2011HistoricalCentral bank financing
Government bond yield pegs and yield curve controlWartime Federal Reserve–Treasury interest-rate support policy, ended by the March 1951 Accord
1942 → 1951HistoricalCentral bank financing
Reserve-financed government bond purchases (QE)Federal Open Market Committee decision of 18 March 2009, Treasury component of the large-scale asset purchase programme
2009HistoricalCentral bank financing
Maturity extension and Operation TwistFOMC decision of 21 September 2011 establishing the Maturity Extension Program
2011 → 2012Historical
BlockBlock the exits
Real asset restrictions
Gold ownership limits and licensing of dealingTreasury regulations under Executive Order of 5 April 1933, reproduced in Federal Reserve Bulletin May 1933
1933HistoricalCapital controls
Surrender and repatriation requirements for foreign currency and goldExecutive Order 6102 of 5 April 1933 (forbidding the hoarding of gold coin, gold bullion and gold certificates), followed by the Gold Reserve Act of 1934; private gold ownership barred until 1974
1933 → 1974HistoricalReal asset restrictions
Rent freezes and fixed base-date rentsEmergency Price Control Act of 1942, section 2(b), as amended through 1944
1942 → 1944HistoricalCapital controls
Interest equalization taxes on residents' purchases of foreign securitiesInterest Equalization Tax Act, Pub. L. 88-563, 78 Stat. 809 (2 September 1964; Internal Revenue Code chapter 41, ss. 4911-4920, retroactive to 18 July 1963)
1963 → 1974HistoricalCapital controls
Mandatory limits and approval regimes for outward investmentExecutive Order 11387 of 1 January 1968 (Governing Certain Capital Transfers Abroad), s. 1 (Foreign Direct Investment Program)
1968HistoricalTransaction taxes
Taxes on foreign-currency purchases and outward transfers26 U.S.C. § 4475 (remittance transfer tax, added by Pub. L. 119-21, § 70604)
2026 → nowIn force
RewriteRewrite the deal in a crisis
Extraordinary measures
Abrogation of gold, currency and indexation clausesJoint Resolution of 5 June 1933 (H.J.Res. 192); Perry v. United States, 294 U.S. 330 (1935)
1933 → 1935HistoricalExtraordinary measures
Compulsory surrender (confiscation) of private goldExecutive Order 6102 of 5 April 1933 (under s.5(b) Trading with the Enemy Act as amended by the Emergency Banking Act)
1933HistoricalExtraordinary measures
Compulsory surrender (confiscation) of private goldExecutive Order 6260 of 28 August 1933
1933Historical
Further reading
- Reassessing the fall in US public debt after World War II
Acalin, Ball · CEPR, 2023
Reassesses the US postwar debt decline by separating growth from primary surpluses, surprise inflation and the Federal Reserve’s wartime rate peg. It argues that growth alone explains much less debt reduction than commonly claimed and that repeating the historical interest-rate distortions would be difficult.
- Monetisation: Do not panic
Pisani-Ferry, Blanchard · CEPR, 2020
Argues, from the April 2020 perspective, that pandemic bond purchases did not themselves establish fiscal dominance or inevitable inflation. Whether central banks later raise rates and remunerate reserves matters more than the initial scale of purchases.
- Financial Repression: Evidence and Theory
Chari, Dovis, Kehoe · Federal Reserve Bank of Minneapolis, 2016
Explains how compulsory bank holdings can strengthen a government’s commitment to repay by making default more costly. The model supports repression only under urgent financing needs and weak repayment credibility, because the benefit comes at the expense of productive private investment.
- The Liquidation of Government Debt
Reinhart, Sbrancia · IMF, 2015
Reconstructs government debt portfolios to measure the transfer from savers to governments when controlled interest rates combine with inflation. It finds substantial postwar debt liquidation and explains why high debt after the global financial crisis could revive these policies.
- Tracking Global Demand for Advanced Economy Sovereign Debt
Arslanalp, Tsuda · IMF, 2012
Builds comparable sovereign-debt holdings by investor group and introduces indicators of exposure to investor withdrawals. It documents increased bank exposure to home-country government debt after 2008, providing data for studying captive demand without assuming every domestic holding is coerced.
- Financial repression: Then and now
Reinhart, Kirkegaard · CEPR, 2012
Documents the post-2008 return of negative real rates and policies that encourage domestic institutions to absorb public debt. The authors interpret preferential regulatory treatment, pension restrictions and deposit-rate limits as possible modern forms of repression.