U.S. digital dollar faces midnight ban under housing bill’s CBDC limit

A temporary federal restriction on a U.S. government-issued digital dollar is set to take effect at midnight as part of a bipartisan housing bill, even though President Donald Trump has declined to sign the measure, according to a report from CoinDesk.

The provision targets a central bank digital currency, or CBDC, a form of digital money that would be issued or backed by the Federal Reserve rather than by a private crypto company. The measure is described as temporary, meaning it does not permanently bar future federal work on a digital dollar. But its inclusion in a housing bill underscores how digital currency policy has become entangled with broader legislative negotiations in Washington.

Under the reported timeline, the housing bill is expected to go into effect automatically at midnight. In the U.S. legislative process, a bill can become law without a president’s signature if Congress remains in session and the required time period passes after the measure is presented to the White House. Trump’s refusal to sign the bipartisan measure does not necessarily stop it from taking effect under those circumstances.

CBDC debate moves into housing law

The CBDC language adds a crypto policy flashpoint to a bill otherwise centered on housing. Supporters of limits on a digital dollar have argued that a government-run digital currency could raise privacy and financial surveillance concerns. Critics of such limits say a blanket pause could put the United States behind other countries that are studying or testing central bank digital currencies.

The Federal Reserve has examined the concept of a digital dollar but has not launched one. Fed officials have repeatedly said any move toward a U.S. CBDC would require support from elected leaders and would need to address questions about privacy, security, financial inclusion and the role of commercial banks.

The temporary ban does not appear to directly affect bitcoin, ether, stablecoins or other privately issued digital assets. Those markets operate separately from a potential federal digital dollar, though the same policymakers often consider them within the broader debate over the future of money, payments and financial regulation.

Crypto policy remains politically charged

The expected effective date comes as Congress and federal agencies continue to wrestle with how to regulate digital assets. Lawmakers have considered measures covering stablecoins, market structure and anti-money-laundering requirements, while banking regulators have taken a cautious approach toward crypto-related activities in the financial system.

For the crypto industry, the CBDC restriction may be read as another sign that digital asset policy is no longer confined to specialized financial legislation. Provisions tied to crypto and payments can surface in larger bills that have broader political support or must-pass urgency.

The immediate impact is a pause on the federal government’s ability to advance a digital dollar under the terms of the housing law’s CBDC limit. The longer-term effect will depend on how long the restriction lasts, whether Congress revisits the issue and how the administration responds once the measure is in force.