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As expected, lawmakers in North Carolina have pushed through a bill that will ban the state from dealing in central bank digital currency (CBDC), in defiance of a gubernatorial veto.
Last week, the North Carolina Senate voted to override the veto of Democrat Governor Roy Cooper in a 27-17 vote.
The move follows an earlier vote in the House of Representatives at the end of July, when lawmakers voted 73-41 to override Cooper’s veto.
The end result is that House Bill (HB) 690, also known as the No Central Bank Digital Currency Payments to State bill, will now become law.
As Vixio heard from lawmakers in July, the governor’s veto is null and void if a bill receives two-thirds majority support in both the House and the Senate subsequent to the veto.
Cooper vetoed the bill on the grounds that it was “premature, vague and reactionary”, and that it proposes an end result to “important monetary decisions” that have not yet been made.
“Efforts are being made at the federal level to ensure standards and safeguards are in place to protect consumers, investors and businesses that may want to make monetary transactions in digital assets,” he said.
“North Carolina should wait to see how they work before taking action. Instead of this bill, the legislature should have passed a budget to provide more funding for cybersecurity threats that actually exist now.”
Representative Harry Warren (R) was one of two primary sponsors of the bill and one of nine Republican lawmakers who sponsored the bill.
Speaking with Vixio, he said the bill is “proactive and preventative: not premature”.
“The language is concise and clear; there is nothing vague about it,” he said. “It is, however, in reaction to the federal government and global interest in the concept of central bank digital currency.”
Warren said he also sponsored the bill to protect the privacy of individuals and to uphold their right to transact in their own digital assets.
What’s in the bill?
HB 690 prohibits all North Carolina state agencies from accepting payments using CBDC, or from participating in any test of CBDC by any Federal Reserve branch.
The bill defines CBDC as any digital currency, digital medium of exchange or digital monetary unit of account issued by the Federal Reserve System or other federal agency that is made available directly to consumers.
The term also includes any digital currency, digital medium of exchange or digital monetary unit of account that is processed or validated directly by the Federal Reserve System or other federal agencies.
CBDC resistance in other US states
With the passage of HB 690, North Carolina becomes the sixth US state to enact legislation banning the use of CBDC, following in the footsteps of Louisiana, Florida, Alabama, Indiana and South Dakota.
Other US states currently considering legislation to ban or limit the use of CBDC include Hawaii, Nebraska, Utah, Wisconsin, Oklahoma, Tennessee, Missouri and New Hampshire.
