North Carolina’s General Assembly approved legislation on Wednesday that prohibits the state government from utilizing or accepting a central bank digital currency (CBDC) issued by the Federal Reserve. House Bill 690, having received overwhelming support with a 109-4 vote in the House on June 26, and a 39-5 vote in the Senate, now awaits Governor Roy Cooper’s signature to become law.
If enacted, the bill would immediately prevent state agencies and courts from accepting any form of payment using a CBDC and would prohibit their involvement in CBDC trials conducted by any Federal Reserve branch. The bill’s passage coincides with similar actions in Louisiana, where Governor Jeff Landry recently signed legislation barring the state government from adopting or participating in CBDC initiatives, also ensuring the right to self-custody crypto.
The widespread backing of North Carolina’s bill indicates potential for override should Governor Cooper choose to veto, as it commands significant support across both legislative chambers. At present, there has been no official response from Governor Cooper’s office regarding his stance on the bill.
During a March hearing at the federal Senate Banking Committee, Federal Reserve Chair Jerome Powell emphasized that the U.S. currently has no immediate plans to recommend or adopt a CBDC in any form, despite ongoing global interest and experimentation. Nevertheless, the U.S. House recently passed a bill aimed at preventing the Federal Reserve from developing a CBDC, now awaiting Senate consideration.
A June 14 poll by the Bank for International Settlements (BIS) revealed that 94% of central banks surveyed are exploring CBDCs, highlighting a notable increase in wholesale CBDC experiments and pilots. The BIS anticipates that central banks are more likely to issue wholesale CBDCs in the near future, designed primarily for institutional use, compared to retail CBDCs intended for general public use, although many features of CBDCs remain undecided.
For further reading on related topics, consider exploring the risks associated with “Unstablecoins” including depegging and potential bank runs.