North Carolina Governor Roy Cooper rejected a bill on June 5 that would have prohibited the state from accepting payments in a central bank digital currency (CBDC) issued by the U.S. Federal Reserve. House Bill 690 would have also restricted the state from participating in the Federal Reserve's CBDC testing.
Cooper noted in a statement that efforts are underway at the federal level to ensure that CBDCs have the right standards and safeguards for consumers, adding that vetoing the bill would open the door to those who want to conduct transactions using CBDCs.
Cooper said North Carolina should “wait and see” how a CBDC works before making a final decision. He said the bill is inadequate to pass into law as it stands, adding:
“This bill is premature, vague and reactionary, and proposes finality for important financial decisions that have yet to be made.”
Cooper also said Congress should have allocated more funding to address current cybersecurity threats instead of passing the now-vetoed bill.
In March, Federal Reserve Chairman Jerome Powell said at a Senate Banking Committee hearing that the U.S. was “a long way from encouraging, much less adopting, any form of central bank digital currency.”
Governor criticized for vetoing bill
Governor Cooper has received widespread criticism for vetoing a bill that received overwhelming votes in both the House and Senate. The bill, introduced in April 2023, received 109 votes in favor and only 4 votes against in the House and 39 votes in favor and 5 votes against in the Senate.
Dan Sparrer, head of industry affairs at the Blockchain Association, expressed disappointment over the veto in a July 6 X post, saying:
“By vetoing this bill, @NC_Governor missed an opportunity to send a clear message to @FederalReserve that North Carolina stands united in opposition to the creation of a #CBDC.”
Sparrer added that any policy regarding digital assets “must be left in the hands of the American people” to reflect “our values of privacy, individual sovereignty, and free market competitiveness.”
The bill had near-unanimous support in the House and Senate, meaning lawmakers could easily override a veto with a three-fifths majority vote in both chambers. As Sparrer said, “This veto has to be overridden.”
It is worth noting that North Carolina is not the only state drafting anti-CBDC legislation: Florida passed a bill banning the use of CBDCs within the state due to concerns around state oversight.
