The White House issued an executive order directing the Federal Government to phase out paper-based payments and move to electronic methods for federal disbursements and receipts, citing higher fraud and loss risks and the cost of maintaining paper-processing infrastructure. The order states that the transition is to the extent permissible under applicable law and is not intended to establish a central bank digital currency. Effective 30 September 2025, the Secretary of the Treasury is to cease issuing paper checks for federal disbursements, including intragovernmental payments, benefits, vendor payments, and tax refunds, subject to defined exceptions. Agencies must transition recipients to electronic funds transfer (EFT) methods such as direct deposit, prepaid card accounts, and other digital options, while federal receipts are to be processed electronically as soon as practicable. Treasury is to support agencies through its centralized payment systems, including access to direct deposit, debit and credit card payments, digital wallets and real-time payment systems, and other electronic options; designated departments are also directed to take action to eliminate the need for Treasury’s physical lockbox services and expedite electronic collection of fees, fines, loans, and taxes. Treasury must review and, as appropriate, revise procedures for limited exceptions where electronic methods are not feasible, including for unbanked individuals, certain emergency payments contemplated in 31 C.F.R. Part 208, national security or law enforcement activities, and other circumstances determined by Treasury, with alternative payment options to be provided. Agency heads must submit compliance plans to the Director of the Office of Management and Budget within 90 days, and the Secretary of the Treasury must submit an implementation report to the President within 180 days.

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