North Carolina Joins Florida in Opposing CBDCs

In a recent move against Central Bank Digital Currencies (CBDCs), North Carolina’s House of Representatives has unanimously voted in favor of a bill that bans government entities from accepting CBDCs. This decision follows a growing trend of opposition to CBDCs from the Republican party and some critics from the Democrat side. With North Carolina joining Florida in its resistance, the debate surrounding CBDCs has been thrust into the national spotlight.

The Vote on House Bill 690

On May 3, 118 House members agreed to pass House Bill 690, which prohibits the state’s acceptance of CBDCs by government entities. Only two members abstained from the vote, with none voting against it. In addition to the ban on acceptance, the bill prevents the state from participating in Federal Reserve branch testing of potential CBDCs.

Initially proposed in April as “AN ACT TO PROHIBIT PAYMENTS IN CRYPTOCURRENCY TO THE STATE,” the bill was modified on May 2 to replace the term “cryptocurrency” with “central bank digital currency.” 

The revised definition encompasses a digital currency, digital medium of exchange, or digital monetary unit of account issued by the US Federal Reserve System or a federal agency, made directly available to consumers by these entities.

Legislation Progress and Next Steps

Following three readings in the House and a successful pass, the legislation must now move through the Senate. There, it must gain approval from Governor Roy Cooper before being signed into law.

North Carolina is not alone in its opposition to CBDCs. For example, Florida Governor Ron DeSantis called on the state legislature to ban CBDC use as money within Florida’s uniform commercial code last March. 

DeSantis criticized CBDCs for providing the government with a direct view of consumer activities, which could be used to “cut off access to goods and services” similarly to China’s digital yuan.

Bipartisan Concerns Over CBDC Repercussions

Republican congress members, including Tom Emmer and Ted Cruz, have attempted to introduce federal legislation banning CBDC implementation by the central bank. They mainly cite privacy invasion concerns. Former and current Democratic presidential candidates Tulsi Gabbard and Robert Kennedy Jr. have expressed similar sentiments within the past month.

In a related development, North Carolina’s Buncombe County Board of Commissioners approved a one-year moratorium on Bitcoin mining due to concerns about noise and pollution caused by such facilities. Democrat politicians have often opposed Bitcoin mining due to its contribution to greenhouse gas emissions. 

In line with this, the Biden White House published a blog post this week urging Congress to impose a 30% tax on the Bitcoin mining industry to make it pay for its ‘societal harms.’

The Future of CBDCs in the United States

As the opposition to CBDCs gains momentum in the United States, it remains to be seen how the debate will unfold at the federal level. 

With states like North Carolina and Florida taking a stand against CBDCs, the future of these digital currencies in the country hangs in the balance. 

The outcome could have significant implications for the global financial landscape.

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