North Carolina is making significant strides in the realm of digital currency legislation. On April 10, Representative Neal Jackson introduced the North Carolina Digital Asset Freedom Act, aiming to recognize certain digital assets as valid forms of payment, including for taxes.
Key Features of the Digital Asset Freedom Act
The proposed legislation outlines specific criteria for a digital asset to be acknowledged under the act:
- A minimum market capitalization of $750 billion.
- Daily trading volumes exceeding $10 billion.
- A track record spanning at least a decade.
- Utilization of a proof-of-work consensus mechanism.
- Absence of centralized governance or control.
- Demonstrated resistance to censorship.
- Network uptime of 99.98% or higher.
- A fixed maximum supply cap.
While the bill doesn’t explicitly mention Bitcoin, these stringent requirements closely align with its characteristics, suggesting that Bitcoin would qualify under this framework.
The act also permits the use of qualifying digital assets for tax payments, provided the payer reports the U.S. dollar equivalent at the time of the transaction. Additionally, it mandates privacy protections, ensuring that parties involved in digital asset transactions aren’t compelled to disclose personal financial information.
North Carolina’s Stance on Central Bank Digital Currencies (CBDCs)
In a related development, North Carolina has taken a definitive position against the adoption of central bank digital currencies. In July 2024, Governor Roy Cooper vetoed House Bill 690, which sought to prohibit state agencies from accepting CBDCs or participating in their testing. However, the General Assembly overrode this veto, with the House voting 73-41 in August and the Senate following with a 27-17 vote in September, thereby enacting the bill into law.
This legislation positions North Carolina among a growing number of states expressing skepticism toward CBDCs, citing concerns over privacy and governmental overreach. Dan Spuller, head of industry affairs at the Blockchain Association, commended the state’s decisive action, emphasizing the importance of safeguarding financial autonomy.
North Carolina’s proactive approach reflects a broader trend among U.S. states exploring the integration of digital assets into their financial systems while simultaneously resisting centralized digital currencies. As the Digital Asset Freedom Act progresses through the legislative process, its outcomes could set a precedent for how states balance innovation with regulatory oversight in the evolving digital economy.
