North Carolina Legislature Overrides Governor’s Veto on CBDC Bill

In a significant political move, North Carolina’s legislature has successfully overridden Governor Roy Cooper’s veto regarding a bill aimed at restricting the state’s engagement with central bank digital currencies (CBDCs).

Key Legislative Actions

On September 9, the Republican-controlled Senate voted 27–17 in favor of House Bill 690, surpassing the necessary 60% threshold to overturn the governor’s decision. This legislation effectively bars North Carolina from accepting CBDCs as a form of payment and limits participation in the Federal Reserve’s CBDC initiatives.

Governor Cooper’s Initial Veto

The governor had vetoed the bill in July, citing its lack of clarity and labeling it as a reactionary measure that failed to adequately address pressing issues. He encouraged lawmakers to focus their efforts on budgetary matters related to cybersecurity.

Reactions to the Override

Dan Spuller, the head of industry affairs at the Blockchain Association, criticized the governor’s veto, viewing the legislative move as an opportunity to safeguard individual rights regarding digital currencies. He stated:

“Thankfully, [North Carolina lawmakers] have shown true leadership by ensuring that Digital Assets policy remains in the hands of the American people, assuring that any development of digital currency upholds our values of privacy, individual sovereignty, and free market competitiveness.”

Understanding CBDCs

Central bank digital currencies (CBDCs) represent digital forms of state-issued money, designed to enhance the efficiency of fiat transactions through blockchain technology.

According to the Atlantic Council’s CBDC tracker, there is a global movement towards the exploration of CBDCs, with countries responsible for 98% of the world’s GDP actively investigating their adoption.

Pros and Cons of CBDCs

• The International Monetary Fund (IMF) posits that CBDCs could promote financial inclusion and reduce transaction costs.
• However, the IMF also cautioned that the introduction of CBDCs could jeopardize the financial stability of the issuing nation.

Political Divide in the U.S.

The topic of CBDCs remains controversial in the United States. Notably, Democratic figures like Senator Elizabeth Warren support their implementation, whereas numerous Republicans, including former President Donald Trump, firmly oppose them.

The Federal Reserve’s Stance

As of now, the Federal Reserve has not taken a definitive position on the establishment of a CBDC, stating that any movement in this direction would necessitate legal authorization.