North Carolina Moves Closer to Banning US CBDC Amid Legislative Tensions

The North Carolina General Assembly's bill to ban the state from testing or accepting a United States central bank digital currency (CBDC) is still alive after the state House of Representatives overrode Governor Roy Cooper's veto. The bill now awaits action in the state Senate, where it must also pass to become law.

The North Carolina CBDC bill. Source: The North Carolina Legislature

Strong Bipartisan Support for Ban

The bill initially passed both chambers with overwhelming bipartisan support on June 26.

The General Assembly, dominated by the Republican party, has expressed strong opposition to a US CBDC, both at the state and national levels. The House's successful veto override has moved the issue to the Senate Committee on Rules.

Governor's Veto and Reactions

Governor Roy Cooper, a Democrat, vetoed the bill on July 5, describing it as "premature, vague and reactionary." He argued that the legislation proposed a definitive stance on monetary decisions that have not yet been made.

Only two Democratic lawmakers supported the veto override, with 40 changing their position since the bill's initial passage. State Representative Mary Belk, who opposed the bill and the override, voiced concerns about limiting digital economy choices prematurely.

Broader State Opposition

North Carolina is among several states, including Utah, South Carolina, South Dakota, Tennessee, Florida, and Louisiana, that are seeking to block the introduction of a US CBDC.

This opposition reflects a broader unease among certain states about the potential implications of a federal digital currency.

Federal Perspective

Despite the states' actions, US Federal Reserve Chair Jerome Powell stated on July 31 that there has been no significant progress on a US CBDC. The Federal Reserve has reiterated that any introduction of a CBDC would require Congressional approval.

Nonetheless, the US House of Representatives passed the CBDC Anti-Surveillance State Act in May, and a companion bill has been introduced in the Senate by Senator Ted Cruz.