Governor Vetoes Bill on Central Bank Digital Currency
On June 5, North Carolina Governor Roy Cooper vetoed House Bill No. 690. This bill aimed to prohibit the state from accepting payments in U.S. Federal Reserve-issued central bank digital currency (CBDC). It also sought to prevent the state from participating in any CBDC testing by the Federal Reserve.
Federal Efforts and Consumer Safeguards
In his statement, Governor Cooper emphasized ongoing federal efforts to establish appropriate standards and safeguards for CBDC use. He argued that vetoing the bill keeps the possibility open for those interested in using CBDCs. Cooper suggested that North Carolina should “wait to see” how CBDCs function before making a final decision. He described the bill as premature, vague, and reactionary. It proposed conclusions on significant monetary decisions that had not yet been finalized.
Focus on Cybersecurity
Cooper also highlighted the need for the legislature to allocate more funding to address current cybersecurity threats. This, he argued, was more pressing than focusing on the now-vetoed bill.
Federal Reserve’s Position
In March, Federal Reserve Chair Jerome Powell mentioned at a Senate Banking Committee hearing that the U.S. was far from recommending or adopting any form of CBDC.
Criticism of the Veto
Governor Cooper faced substantial criticism for vetoing the bill. The bill had garnered overwhelming support in both the House of Representatives and the Senate. Introduced in April 2023, it had only four votes against it in the House compared to 109 in favor. Similarly, five votes were against it in the Senate compared to 39 in favor.
Industry Response
Dan Spuller, head of industry affairs at the Blockchain Association, expressed his disappointment in a social media post on July 6. He stated that Governor Cooper missed an opportunity to signal North Carolina’s opposition to the creation of a CBDC. Spuller added that policies related to digital assets should remain in the hands of the American people. This ensures they reflect values such as privacy, individual sovereignty, and free market competitiveness.
Potential Override of the Veto
Given the bill’s near-unanimous support in both legislative chambers, lawmakers can potentially override the veto with a three-fifths majority. Spuller emphasized the importance of overriding the veto.
Broader Anti-CBDC Movement
It is notable that North Carolina is not alone in its stance against CBDCs. Florida recently passed legislation to ban the use of CBDCs, citing concerns about state-controlled surveillance.
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