North Carolina governor vetoes anti-CBDC bill

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North Carolina Governor Roy Cooper has vetoed a bill that would have banned the state from implementing a U.S. Federal Reserve-issued central bank digital currency (CBDC) despite it passing the state’s House of Representatives and Senate in near-unanimous votes.

Cooper explained his decision in a July 5 statement, saying the bill was “premature, vague and reactionary and proposes an end result on important monetary decisions that haven’t even been made yet.”

The Governor’s veto has drawn criticism from certain sections of the blockchain industry, but Cooper insisted that instead of putting forward a ban on CBDC, “the legislature should have passed a budget to provide more funding for cybersecurity threats that actually exist now.”

“Efforts are being made at the federal level to ensure standards and safeguards are in place to protect consumers, investors and businesses that may want to make monetary transactions in digital assets and North Carolina should wait to see how they work before taking action,” he said.

The veto followed a resounding 109–4 vote in the House on June 26, the day after an equally unambiguous 39–5 vote in the Senate.

If it became law, the bill would prevent state agencies and courts from accepting “payment using central bank digital currency” and ban them from participating in CBDC tests “by any Federal Reserve branch.” Despite Cooper’s decision, the bill is not dead yet.

Given the near-unanimous votes in the state House and Senate, North Carolina lawmakers could override Cooper’s veto with a three-fifths majority in both chambers.

This may well be on the cards, given some of the backlash the decision has received.

Preemptive criticism for hypothetical policy

Dan Spuller, head of industry affairs at the Blockchain Association, said he was “disappointed” with Cooper’s decision and called for it to be overturned.

“By vetoing this bill, NC Governor missed an opportunity to send a clear message to the Federal Reserve that North Carolina stands united against the creation of a CBDC. This veto must be overridden,” wrote Spuller on X.

“Digital asset policy must remain in the hands of the American people, ensuring that any development of digital currency reflects our values of privacy, individual sovereignty, and free market competitiveness.”

Despite the concerns of Spuller and other like-minded digital asset advocates, the Federal Reserve has thus far been unequivocal that it does not intend to impose itself on ‘digital asset policy’ through a CBDC.

In March, the central bank’s Chair, Jerome Powell, told a Senate Banking Committee hearing that the U.S. was “nowhere near recommending – or let alone adopting – a central bank digital currency in any form.”

It remains to be seen whether the North Carolina legislature will overturn Governor Cooper’s veto and see it join Florida and Louisiana in the anti-CBDC club, both states having already banned a federally adopted CBDC in May 2023 and June 2024, respectively.

Watch: Finding ways to use CBDC outside of digital currencies