North Carolina CBDC Ban: What It Means for Crypto and Web3

North Carolina Governor Roy Cooper will soon decide whether to sign or veto a newly passed law that prevents the state’s government from accepting a Federal Reserve central bank digital currency (CBDC). This development follows in the footsteps of Louisiana, where a similar law was recently enacted.

House Bill 690: Key Details

The North Carolina General Assembly passed House Bill 690 on Wednesday, aiming to restrict the state’s government from using and accepting a Federal Reserve-issued CBDC. The bill now awaits Governor Roy Cooper’s decision after it was approved by the state’s House in a 109-4 vote on June 26, following a 39-5 vote in the Senate.

If signed into law, the North Carolina CBDC ban would immediately prohibit state agencies and courts from accepting “payment using central bank digital currency.” Additionally, it would prevent them from participating in any CBDC tests conducted by Federal Reserve branches.

The timing of the North Carolina CBDC ban coincides with Louisiana Governor Jeff Landry signing a similar bill. Louisiana’s legislation bans the government from accepting or participating in a CBDC and includes a provision to ensure the right to self-custody crypto. This move also has implications for other cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH).

Given the broad support for the North Carolina bill, a potential veto by Governor Cooper could easily be overridden, as more than three-fifths of lawmakers in both chambers have backed the legislation. Cooper’s office has yet to comment on his plans regarding the bill.

Federal and International Perspectives

Speaking at a federal Senate Banking Committee hearing in March, Federal Reserve Chair Jerome Powell stated that the U.S. was “nowhere near recommending or let alone adopting a central bank digital currency in any form.” Nevertheless, the U.S. House passed a bill last month to ban the Federal Reserve from offering a CBDC, which now proceeds to the Senate.

A June 14 survey by the Bank for International Settlements (BIS) revealed that 94% of central banks are exploring a CBDC. The BIS reported a significant increase in wholesale CBDC experiments and pilots, suggesting that within the next six years, a central bank is more likely to issue a wholesale CBDC rather than a retail one, which everyday consumers would use. However, many features of CBDCs remain undecided, affecting the latest crypto news and ongoing developments.

Does the North Carolina CBDC Ban Impact the Crypto Landscape?

The North Carolina CBDC ban and similar actions in other states reflect growing scepticism and regulatory caution towards central bank digital currencies in the United States. As states like North Carolina and Louisiana take steps to limit the influence of CBDCs, the broader cryptocurrency market,  including Bitcoin Ethereum (BTC ETH), and other digital assets such as NFTs, continues to evolve. This legislative move is part of the latest crypto update that highlights the ongoing debates and developments in the crypto space.

North Carolina positions itself at a critical juncture in the national conversation by restricting the use of CBDCs, which is about digital currencies and their place in the financial ecosystem. This decision may influence other states to consider similar legislation and could have broader implications for the future of digital currency regulation in the U.S.

Conclusion

Governor Roy Cooper’s upcoming decision on House Bill 690 will determine whether North Carolina will officially implement the CBDC ban. As the state awaits his decision, lawmakers and the crypto community are closely watching the implications of this move.  The BIT Journal states that the outcome could shape the future regulatory landscape for digital currencies not just in North Carolina, but potentially across the United States.