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TLDR:
- North Carolina Senate overrode Governor Cooper’s veto of anti-CBDC bill
- Bill bans state from accepting CBDCs as payment or participating in CBDC tests
- Initially passed with bipartisan support, but Democrats switched to back veto
- Governor Cooper called the bill “premature, vague and reactionary”
- Federal Reserve Chair Powell has stated U.S. is not close to adopting a CBDC
North Carolina has become the latest state to enact legislation banning the use of central bank digital currencies (CBDCs), following a contentious override of Governor Roy Cooper’s veto.
The bill, known as House Bill 690, prohibits the state from accepting CBDCs as a form of payment and bars participation in any Federal Reserve CBDC testing programs.
The legislative journey of this bill has been marked by political maneuvering and shifting alliances. Initially, the bill passed both chambers of the North Carolina General Assembly with overwhelming bipartisan support.
The House approved it with a 109-4 vote, while the Senate passed it 39-5 in June.
However, the landscape changed when Governor Cooper, a Democrat, vetoed the bill on July 5. In his veto statement, Cooper characterized the legislation as “premature, vague and reactionary,” arguing that it proposed “an end result on important monetary decisions that haven’t even been made yet.”
The governor suggested that the legislature should focus on more immediate concerns, such as cybersecurity threats.
The veto triggered a series of political realignments. When the bill returned to the legislature for an override vote, many Democratic lawmakers who had initially supported the measure switched their positions to back the governor’s veto. The House of Representatives voted 73-41 to override the veto in early August.
The final hurdle was cleared on September 9, when the Senate voted 27-17 to override the veto, just barely surpassing the required three-fifths majority.
This vote saw a significant shift, with 12 Democratic senators who had originally voted for the bill changing their stance to support the governor’s veto.
The newly enacted law places North Carolina among a growing number of states taking preemptive action against the potential implementation of a federal CBDC. Florida and Louisiana passed similar laws in 2023 and 2024, respectively.
Proponents of the bill, primarily Republicans and some cryptocurrency advocates, argue that it safeguards financial privacy and state sovereignty.
Senator Brad Overcash, a Republican from Gaston County, stated that the law sends a signal that “North Carolina, the ninth largest state in the union, is not interested in a federal central bank digital currency.”
Critics of the legislation, including Governor Cooper, contend that it is an unnecessary and premature reaction to a nonexistent threat. They point out that the Federal Reserve has not committed to implementing a CBDC and is still in the exploratory stages of the concept.
Indeed, Federal Reserve Chair Jerome Powell has repeatedly stated that the U.S. is “nowhere near recommending or let alone adopting a central bank digital currency in any form.” In July, Powell emphasized that “there’s really nothing new going on at all” regarding a U.S.-issued CBDC.
North Carolina’s decision may influence other states considering similar legislation. However, the practical implications of these state-level bans remain uncertain, especially given the federal government’s current stance on CBDCs.
English (US) ·