North Carolina lawmakers have overturned Governor Roy Cooper’s veto of a bill that would have prevented the state from implementing a central bank digital currency (CBDC).
On September 9, the Republican-controlled Senate passed House Bill 690 by a vote of 27–17, passing the 60% threshold needed to overturn the governor’s rejection. This effectively prevents North Carolina from accepting payments in a CBDC and participating in the Federal Reserve’s CBDC trials.
Governor Cooper initially vetoed the bill in July, arguing it was unclear and a reactionary measure. He emphasized that the bill does not address immediate threats and urged lawmakers to focus on cybersecurity-related budget issues.
However, Dan Spuller, head of industry affairs at the Blockchain Association, criticized the veto, calling it a missed opportunity to take a strong stand against CBDCs. He added:
“Happy, [North Carolina lawmakers] have shown real leadership in ensuring that DigitalAssets policy remains in the hands of the American people, and ensuring that any digital currency development upholds our values of privacy, individual sovereignty, and free market competitiveness.”
CBDCs
CBDCs are digital versions of government-issued currencies, built on blockchain technology to facilitate fiat currency transactions.
The Atlantic Council’s CBDC tracker shows these currencies are gaining momentum globally, with countries representing 98% of global GDP exploring their implementation.
In particular, financial organizations such as the International Monetary Fund (IMF) have argued that the assets could promote economic inclusion and reduce the cost of financial services. However, the IMF also warned that the currency could also affect the financial stability of the issuing country.
Despite their global popularity, CBDCs are divisive in the US. Democrats, such as Senator Elizabeth Warren, advocate its use, while Republicans, such as former President Donald Trump, oppose it.
Meanwhile, the Federal Reserve remains undecided on launching a CBDC. The regulator noted that such a decision would require regulatory approval.