US Digital Dollar to Be Banned Tonight Under Housing Law's CBDC Limit

The US crypto industry is securing an unexpected legal victory in its long-standing battle against the threat of a Central Bank Digital Currency (CBDC). A provision prohibiting the issuance of a digital dollar—viewed by Republican lawmakers as a potential overreach of government surveillance—is hidden within the housing bill set to pass into law in the first moments of Saturday.

Legislative Maneuver and the Midnight Enactment

The restriction, which bars the Federal Reserve from issuing its own digital currency for four years, was embedded in Congress's bipartisan housing-affordability bill. Despite the lack of a serious effort to institute a CBDC in the US, the move solidifies a barrier against potential future government-controlled currencies.

■President Donald Trump refused to sign the bill, citing a protest over the Senate's failure to pass "THE SAVE AMERICA ACT" on his Truth Social platform.

■However, under the US Constitution, the bill becomes law after a 10-day window without a presidential signature or formal veto.

■The CBDC limit expires at the end of 2030, though there is little appetite at the Fed—even under new Chair Kevin Warsh—to pursue such a currency without congressional backing.

Republicans successfully included this anti-CBDC language in the unrelated housing legislation after previous attempts to attach it to bills like the Foreign Intelligence Surveillance Act. The crypto industry has long opposed the idea, fearing it would compete with privately issued stablecoins.

Market Dynamics and Capital Rotation to AI

While the regulatory landscape shifts with this legislation, digital asset markets are facing headwinds from a significant rotation in institutional capital. The sector has posted a third consecutive quarter of losses in Q2 2026, marking the longest losing streak since the 2022 bear market.

■Institutional capital has notably rotated into AI equities, diverting funds away from digital assets.

■Bitcoin ETFs recorded their largest quarterly outflow since launch.

■Despite the losses, structural adoption has continued, though market sentiment remains dampened by the liquidity shift.

Trump's last-minute refusal to sign the housing bill, reversing plans for a signing ceremony, has raised concerns about the fate of other pending crypto legislation. There is growing speculation that the "Digital Asset Market Clarity Act," if passed by Congress this summer, could face a similar fate of presidential protest or delay.

The CBDC ban serves as a critical supply-side defense for private stablecoins, ensuring the market isn't crowded out by a state monopoly. However, the current price action screams liquidity exhaustion. The massive capital rotation into AI equities suggests that crypto is currently losing the battle for risk capital in institutional portfolios. The real danger isn't the CBDC, but the legislative gridlock jeopardizing the Digital Asset Market Clarity Act. Without regulatory certainty, the smart money will stay on the sidelines, prolonging this bearish structure regardless of the anti-CBDC win.