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10/09/24
98
North Carolina Bans Federal CBDC Amid Political Shift
The North Carolina General Assembly has enacted a bill that prohibits the use of a Federal Reserve-issued central bank digital currency (CBDC) within the state. This move follows the Senate’s successful override of a veto from Governor Roy Cooper, resulting in the passage of House Bill 690.
On September 9, the Republican-controlled Senate voted 27-17 to override Cooper’s veto, managing to secure the necessary 60% majority. This action came after the House had previously voted 73-41 to bypass the governor’s veto in early August. The newly enacted legislation bans any form of CBDC acceptance as payment by the state and disallows participation in any Federal Reserve testing related to CBDCs. Interestingly, Cooper had initially vetoed the bill after it enjoyed overwhelming support in both the House and the Senate.
The Senate vote to override was markedly closer, with 12 Democrats who had previously backed the bill shifting their stance to support Cooper’s veto. This shift resulted in a unanimous opposition from Senate Democrats towards the bill during the override vote.
Critics of the veto, including industry analysts, view the passage of this legislation as significant, arguing that it sends a clear message against the adoption of CBDCs. Concerns have been raised that Cooper’s decision might have been influenced by partisan politics, undermining what some see as a crucial opportunity for the state to collectively resist federal moves toward digital currencies.
Amid discussions surrounding CBDCs, officials at the Federal Reserve have maintained that there is no immediate plan to introduce a U.S. digital currency. However, the growing momentum against CBDCs is illustrated by the recent passage of the CBDC Anti-Surveillance State Act in the House, coupled with a similar initiative introduced in the Senate. This ongoing debate underscores the complexities and implications of digital currency adoption at both state and federal levels.
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