A federal appeals court on Friday cleared the way for the U.S. Postal Service to continue developing a Trump-backed rule that could sharply limit mail-in voting, temporarily staying a nationwide block issued weeks earlier by a district judge who found the proposal breached a 2021 settlement with the NAACP.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit granted USPS's motion to pause a July 1 injunction from U.S. District Judge Emmet Sullivan, a Clinton nominee.

Sullivan had concluded the proposed rule violated the settlement's requirement that the Postal Service take "extraordinary measures" to deliver election mail through 2028.

The panel found USPS likely to succeed on two grounds, ruling the NAACP's challenge is "likely neither constitutionally nor prudentially ripe for review" because the rule has not been finalized, and that the proposal likely would not breach the settlement even if adopted.

It also credited the government's warning that leaving the injunction in place would prevent USPS from issuing a final rule before the November election, Democracy Docket reported.

The proposed rule flows from President Donald Trump's March 31 executive order, "Ensuring Citizenship Verification and Integrity in Federal Elections."

It directs the Department of Homeland Security, working with the Social Security Administration, to build state-by-state lists of verified U.S. citizens eligible to vote, and directs USPS to withhold mail-in and absentee ballots from voters not on those lists.

Under the USPS proposal published June 2, state and local officials would upload voter data through a federal portal, and every ballot envelope would carry a unique barcode tied to a specific voter.

Postmaster General David Steiner told a Senate panel last month the agency would refuse to carry ballots for states that decline to share voter rolls.

Friday's stay does not resolve the merits, and a separate injunction from U.S. District Judge Indira Talwani in Massachusetts continues to bar enforcement of the underlying executive order in 24 jurisdictions, most of them Democratic-led states challenging the policy.

The administration has appealed that ruling to the First Circuit.

Anthony Ashton, senior associate general counsel at the NAACP, said after Sullivan's earlier ruling that "access to the ballot cannot be tied to arbitrary requirements," according to a statement posted by the civil rights group.

The Postal Service must still complete rulemaking, including any required review by the Postal Regulatory Commission, before the proposal can take effect nationwide.