North Carolina Governor Roy Cooper has vetoed a bill that sought to prevent the implementation of central bank digital currencies (CBDCs) within the state. The bill had garnered unanimous approval from both chambers of the North Carolina legislature, aiming to block any CBDC issued by the US Federal Reserve from being used in the state.
Reasons Behind the Veto
Governor Cooper vetoed the bill, citing its vague language and reactionary nature. He emphasized that the bill did not address an immediate threat and urged the legislature to focus on passing a budget to tackle current cybersecurity threats. Cooper stated, “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. North Carolina should wait to see how they work before taking action.”
Response from Crypto Stakeholders
The governor’s veto was met with criticism from crypto stakeholders, who view CBDCs as potential tools for government surveillance and economic manipulation. The North Carolina Blockchain Initiative, a pro-crypto industry group, expressed disappointment, stating, “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 @NC_Blockchain has worked tirelessly to educate and support important legislation like HB 690. It’s unfortunate that Gov. Cooper vetoed this bipartisan bill.
We are thankful for our bipartisanship at nat'l level w/ @RepWileyNickel @PatrickMcHenry @SenTedBuddNC & many more. https://t.co/7AhApuN7Zi
— North Carolina Blockchain Initiative (@NC_Blockchain) July 5, 2024
Despite the veto, the bill may still become law. Market experts noted that the state’s legislature could override the veto with a two-thirds majority vote in both chambers.
Implications for CBDCs in the US
CBDCs are blockchain-based versions of government-issued currency designed to expedite fiat currency transactions. The Atlantic Council CBDC tracker indicates that these currencies have gained global traction, with a significant number of nations and currency unions—comprising 98% of the global GDP—considering their implementation.
In the US, opinions on CBDCs are divided along party lines. Democrats, such as Senator Elizabeth Warren, support the assets, while Republicans, including Senator Ted Cruz and Donald Trump, oppose them. Trump has vowed to prevent the introduction of such currencies if re-elected as US president in the upcoming November elections.
Despite the ongoing debate, the Federal Reserve remains cautious about launching a CBDC. The financial regulator’s website states that no decision has been made regarding the issuance of a CBDC, and any action would require legal authorization.
