North Carolina Passes Bill Banning CBDC Payments and Fed Testing

North Carolina Passes Bill Banning CBDC Payments and Fed Testing

Time Stamp: May 5, 2023 1:35 AM
Source Node: 2629367
  • North Carolina bans CBDC payments to the state and opposes Fed testing.
  • Growing political pushback against CBDCs ahead of 2024 US elections.

The North Carolina House of Representatives has passed a bill, “HB690,” that prohibits individuals from using central bank digital currencies (CBDCs) to make payments to the state. The legislation also prohibits the Federal Reserve from using North Carolina as a potential testing ground for its own CBDC pilot. The bill received unanimous approval with a vote of 118-0 and will now move to the state Senate for further consideration.

The bill was introduced in April by North Carolina lawmakers and proposed amending statutes to require “no State agency nor the General Court of Justice” to accept payments using CBDCs or participate in Fed testing of a digital dollar. 

This new edition came after lawmakers mistakenly introduced the bill with language that would have encompassed Bitcoin as well. The revised bill only prohibits payments using CBDCs and participation in any test of a CBDC by any Federal Reserve branch.

The legislation is a significant move that highlights the state’s concern about the potential risks and implications of CBDCs. Dan Spuller, Director of Industry Affairs at the Blockchain Association, explained that the bill could serve as a model for other states, including Tennessee and Virginia. He also expressed his support for Bitcoin, stating that “any bill that is anti-CBDC is pro-Bitcoin.” Spuller added that the bill’s language aimed to keep things “fairly simple, to the point, and effective.”

Political pushback against CBDCs grows ahead of 2024 US elections 

The legislative push against CBDCs appears to be becoming more politically relevant ahead of the 2024 elections in the United States.

In March, Florida Governor Ron DeSantis, who is expected by many to run for the U.S. presidential race, called for a CBDC ban in the country, claiming the technology was all about “surveilling Americans and controlling their behavior of Americans.” 

At the federal level, Representative Tom Emmer and Senator Ted Cruz have both introduced separate bills. That aimed at restricting the Fed’s authority over CBDCs or proposing an outright ban.

The North Carolina bill will now move to the Senate. Where it must pass before being signed into law or vetoed by Governor Roy Cooper. It remains to be seen whether other states will follow North Carolina’s lead in introducing similar legislation.

In addition to the push against CBDCs, the Board of Commissioners for North Carolina’s Buncombe County also recently approved a one-year moratorium on crypto mining on May 2. The moratorium was put in place to allow the county time to develop regulations. And it will address potential environmental concerns associated with crypto mining.

The North Carolina legislation serves as a reminder. That the development and adoption of CBDCs is a complex issue with potentially far-reaching implications. As the technology continues to evolve, it will be important for policymakers to carefully consider its potential risks and benefits. Also, for the crypto community to engage in thoughtful dialogue and collaboration with regulators.

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