North Carolina Takes Big Step Towards Outlawing CBDCs

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  • North Carolina has passed House Bill 690, which aims to stop the forced introduction of a CBDC into the state
  • The bill has gained support on both sides of the aisle, with Republicans the biggest supporters
  • North Carolina follows Florida in speaking out against CBDCs in the US

North Carolina’s House of Representatives this week passed House Bill 690, which aims to ban government entities from accepting Central Bank Digital Currencies (CBDCs). The legislation was passed unanimously with 118 House members voting in favor, while two members abstained and none voted against it. The bill’s passage is in response to growing opposition to CBDCs among members of the Republican party, as well as some critics from the Democratic side. In addition to the ban on CBDC acceptance, the bill also prohibits the state from participating in any Federal Reserve branch testing related to CBDCs.

Bill Wording Changes to Reflect CBDCs Only

The bill was initially introduced in April entitled initially titled “An Act To Prohibit Payments In Cryptocurrency To The State,” but on May 2, the wording was changed to replace “cryptocurrency” with “central bank digital currency.” The revision defined this as “a digital currency, a digital medium of exchange, or a digital monetary unit of account issued by the US Federal Reserve System or a federal agency that is made directly available to a consumer by such entities.”

After passing through three readings in the House, the legislation must now pass through the Senate and Governor Roy Cooper’s office before it can be enacted into law.

North Carolina Follows Florida’s Lead

As the prospect of a digital dollar gathers steam, governors in some states have taken steps to ensure that it won’t be forced on residents, citing privacy concerns over the monitoring that could take place but the governments over citizens’ use of a CBDC. These include Florida Governor Ron DeSantis, who in March equated CBDCs to the “weaponization of the financial sector”.

In March of last year, DeSantis urged the state legislature to prohibit the use of CBDCs as money within Florida’s uniform commercial code, criticizing them for giving the government “a direct view over all consumer activities” and the ability to “cut off access to goods and services,” similar to China’s digital yuan.