U.S. CBDC ban takes effect at midnight as housing bill becomes law

A four-year ban on the Federal Reserve issuing a digital dollar takes effect at midnight, buried inside a housing bill President Donald Trump refused to sign.

A temporary ban on the Federal Reserve issuing a central bank digital currency takes effect at midnight, tucked inside a bipartisan housing bill that became law without President Donald Trump's signature after he refused to approve it.

"I will not sign the Housing Bill, which has been fully approved by Congress and sent to the White House, in PROTEST over the fact that the United States Senate is not capable of passing THE SAVE AMERICA ACT," Trump wrote Friday on Truth Social.

The 21st Century ROAD to Housing Act, which caps single-family home purchases by major investors and loosens federal construction regulations, cleared Congress with overwhelming bipartisan support last month. Trump had scheduled a signing ceremony June 24 before abruptly canceling it, demanding lawmakers first pass the SAVE America Act — legislation requiring proof of citizenship to register to vote and personal identification at the polls. That bill lacks sufficient support to advance. Under the Constitution, a bill Congress sends to the president becomes law after 10 days without a signature, and Trump chose not to issue a veto.

The CBDC restriction, which expires at the end of 2030, blocks the Fed from issuing a digital dollar that could compete with privately issued stablecoins from issuers such as Circle and Paxos. The central bank had shown limited appetite for a CBDC even before Trump's Fed chair, Kevin Warsh, took over, and previous leadership had said such an effort would require congressional authorization. The provision was slipped into the housing legislation by Republicans after earlier attempts to attach it to bills including the Foreign Intelligence Surveillance Act failed.

The ban arrives as other major economies push ahead with digital currencies. The European Parliament cleared the final legislative step for a digital euro on June 23, and China continues developing its digital yuan. U.S. lawmakers have cited privacy and surveillance concerns in opposing a Fed-issued digital dollar, arguments the crypto industry amplified as it lobbied against potential competition with private stablecoins.

The political standoff over the housing bill has broader implications for crypto legislation. The Digital Asset Market Clarity Act, which would establish a regulatory framework for digital assets, faces an uncertain path if Congress passes it this summer and Trump again withholds his signature to pressure lawmakers on the voter ID bill.

The median U.S. home sales price hit a record $440,000 in June, according to the National Association of Realtors, showing the economic pressure that drove Congress to act on housing affordability. White House economists had estimated a national shortage of 10 million homes.

This article is for informational purposes only and does not constitute investment advice.