Coinspeaker North Carolina Passes House Bill 690 to Block Federal CBDC Testing
The North Carolina General Assembly passed House Bill 690, effectively barring the state from participating in any future Central Bank Digital Currency (CBDC) testing by the Federal Reserve. On September 9, the Senate voted 27-17 to override Governor Roy Cooper’s veto of the bill, signaling a decisive stance on the matter of CBDC within the state.
Notably, a CBDC is a digital form of a government-issued currency, not pegged to a physical commodity. It is issued and regulated by the central bank, similar to traditional fiat currency, but exists only in digital form. The latest bill comes amid ongoing debates across the US regarding the role of the digital dollar in the financial system.
In July, Governor Roy Cooper had previously vetoed the bill, labeling it as “premature, vague, and reactionary”. He argued that the federal government was already implementing safeguards and standards for CBDCs. According to Cooper, North Carolina should have awaited federal action before making any state-level decisions.
Industry Disagrees with Cooper
However, the state legislature disagreed. Blockchain Association’s head of industry affairs, Dan Spuller, expressed disappointment with Cooper’s veto. He criticized the governor for missing the chance to convey that the state is united in its opposition to CBDC.
Spuller added that the passage of House Bill 690 implies that any future CBDC development will prioritize privacy and free market competitiveness.
Earlier this year, the US House of Representatives passed the CBDC Anti-Surveillance State Act, a Republican-led initiative aiming to prevent the Fed from issuing a CBDC to individual citizens.
Meanwhile, North Carolina is equally recognizing the potential benefits of digital assets to stay competitive in innovation. Last year, the state’s General Assembly passed a bill in the lower house directing the Department of State Treasurer to evaluate the feasibility of the state holding Bitcoin.
Global CBDC Developments
Privacy advocates have expressed concerns that a digital dollar could enable excessive government surveillance of personal financial transactions. Former President Donald Trump has also strongly opposed CBDCs, describing them as a “dangerous threat to freedom.” He has vowed to “never allow” the creation of a CBDC, as it would give the Fed “absolute control over [citizens’] money.”
Meanwhile, international interest in CBDCs continues to grow. A June’s survey by the Bank for International Settlements (BIS) found that 94% of the 86 surveyed central banks are actively working on such projects.
Taiwan is set to test a digital voucher system by the end of 2024. On the other hand, China has already conducted various trials and pilots for its Digital Yuan (e-CNY). Moreover, an April report reveals that the Central Bank of Korea is also planning to launch a pilot test of the digital KRW this year.
A survey conducted by the IMF in June for the Central Asia and Middle East region highlighted the potential benefits of CBDCs in promoting financial inclusion and reducing transaction costs.
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North Carolina Passes House Bill 690 to Block Federal CBDC Testing
