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North Carolina Governor Vetoes Bill Blocking Federal CBDCs

2 mins
Updated by Lynn Wang
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In Brief

  • North Carolina Governor Roy Cooper vetoed a bill aimed at blocking the introduction of CBDCs.
  • Cooper emphasized the need for federal standards and safeguards before taking state-level action.
  • The veto may face a legislative override in the state's chambers which supports its implementation.
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North Carolina Governor Roy Cooper vetoed a bill banning the introduction of central bank digital currencies (CBDCs).

The bill, unanimously passed by both chambers of North Carolina, aimed to prevent the implementation of any CBDC issued by the US Federal Reserve within the state.

Why North Carolina Vetoed CBDC Bill

Governor Cooper vetoed the bill due to its vagueness and reactionary nature. He argued that the bill would not address an immediate threat. Instead, he urged the legislature to focus on passing a budget to tackle existing cybersecurity threats.

“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 added.

Read more: Digital Rupee (e-Rupee): A Comprehensive Guide to India’s CBDC

However, crypto stakeholders criticized the governor’s decision, describing CBDCs as potential tools for government surveillance and economic manipulation. Notably, the North Carolina Blockchain Initiative, a pro-crypto industry group, expressed disappointment over the veto of the bipartisan bill.

“The North Carolina Blockchain Initiative has worked tirelessly to educate and support important legislation like HB 690. It’s unfortunate that Gov. Cooper vetoed this bipartisan bill,” the group wrote.

Meanwhile, the governor’s veto might not be the final word on the bill. Market experts noted that the state’s legislature could still override the veto with a two-thirds majority vote in both chambers.

CBDCs are blockchain-based versions of government-issued currency designed to expedite fiat currency transactions. According to the Atlantic Council CBDC tracker, these currencies have gained global traction, with an overwhelming majority of nations and currency unions—comprising 98% of the global GDP—contemplating their implementation.

Central Bank Digital Currencies (CBDC) Tracker
Central Bank Digital Currencies (CBDC) Tracker. Source: Atlantic Coucil

In the US, opinions on CBDCs are divided along party lines. Democrats, like Senator Elizabeth Warren, support the assets, while Republicans, such as Senator Ted Cruz and Donald Trump, oppose them. Notably, Trump has vowed to prevent the introduction of such currencies if he is re-elected as US president in the coming November elections.

Read more: Digital Rupee Tutorial — How to Use India’s CBDC e-Rupee

Despite the drama surrounding these currencies, the Federal Reserve remains skeptical about launching a CBDC. The financial regulator’s website states that no decision has been made regarding issuing a CBDC. It also notes that any action would require legal authorization.

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Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.
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