North Carolina’s General Assembly has passed a bill that prohibits the state’s government from using or accepting a central bank digital currency (CBDC) issued by the Federal Reserve. House Bill 690 now heads to Governor Roy Cooper’s desk for his signature or veto.
Legislative Progress
The bill passed the House with a 109-4 vote on June 26, following a 39-5 vote in the Senate. If signed into law, the bill will immediately prevent state agencies and courts from accepting payments via CBDC and from participating in any Federal Reserve CBDC tests.
Governor’s Decision
Governor Cooper’s decision is pending, and his office has not yet commented on his plans for the bill. The strong legislative support for the bill suggests that a veto could be easily overridden, as it has garnered support from over three-fifths of lawmakers in both chambers.
Similar Legislation in Louisiana
This move comes in the same week that Louisiana Governor Jeff Landry signed a similar bill into law. Louisiana’s bill also prevents the state government from accepting or participating in CBDC and includes a provision ensuring the right to self-custody crypto.
Federal and International Context
Federal Reserve Chair Jerome Powell stated in March that the U.S. is “nowhere near recommending or adopting a central bank digital currency in any form.” Despite this, the U.S. House passed a bill last month to ban the Fed from offering a CBDC, which is now awaiting Senate consideration.
A recent poll by the Bank for International Settlements (BIS) found that 94% of surveyed central banks are exploring CBDCs. The BIS noted a significant increase in wholesale CBDC experiments and pilots, predicting that a wholesale CBDC is more likely to be issued within the next six years than a retail CBDC, which would be for everyday users. However, many features of CBDCs are still undecided.
