North Carolina has taken a strong stance against central bank digital currencies (CBDCs) by passing a bill that would prohibit the state government from accepting or participating in any CBDC initiatives.
The North Carolina Senate recently passed Senate Bill 690 with an overwhelming 109-4 vote. The bill aims to prevent the state's agencies and courts from accepting CBDC payments and from participating in any CBDC pilot projects conducted by the Federal Reserve.
The primary motivation behind this legislation is the concern that CBDCs could undermine the US dollar's status as a global reserve currency and potentially enable increased government surveillance and control over citizens' financial activities. Supporters of the bill, such as Senator Brad Overcash, argue that CBDCs pose a threat to financial privacy and stability.
This move by North Carolina aligns with a broader national skepticism towards CBDCs. Earlier this year, the US House of Representatives passed the CBDC Anti-Surveillance State Act, which would prohibit the Federal Reserve from issuing a CBDC without explicit Congressional authorization. Similar anti-CBDC legislation has also been enacted in Louisiana.
However, the fate of North Carolina's bill now rests in the hands of Governor Roy Cooper, a Democrat. While Cooper has not taken a strong public stance on the issue, the overwhelming bipartisan support for the bill in the state legislature suggests he may be inclined to sign it into law.
If enacted, North Carolina's CBDC ban would make it the second US state, after Louisiana, to preemptively restrict the use of central bank digital currencies within its borders. This could potentially set a precedent for other states to follow suit, reflecting the growing unease among policymakers and the public about the potential implications of CBDCs.
It's worth noting that the Federal Reserve has repeatedly stated that the US is "nowhere near" adopting a CBDC, and the development of a digital dollar remains in the early exploratory stages. Nonetheless, the actions taken by North Carolina and other states demonstrate the heightened concerns surrounding the potential introduction of a central bank-issued digital currency and the desire to maintain control over financial sovereignty at the state level.
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