On May 3, 2023, North Carolina’s House of Representatives passed a bill banning government entities from accepting Central Bank Digital Currencies (CBDCs). The vote, which saw 118 House members in favor and only two abstentions, marked the latest pushback against the implementation of CBDCs.
The legislation, titled House Bill 690, also prohibits the state from participating in Federal Reserve branch testing of potential CBDCs. The bill was initially proposed in April with the title “AN ACT TO PROHIBIT PAYMENTS IN CRYPTOCURRENCY TO THE STATE,” but was modified on May 2 to substitute “cryptocurrency” with “central bank digital currency.”
The bill defines CBDCs as “a digital currency, a digital medium of exchange, or a digital monetary unit of account issued by the US Federal Reserve System or a federal agency that is made directly available to a consumer by such entities.”
Opposition to CBDCs
The vote in North Carolina is just the latest in a wave of opposition to CBDCs, particularly from Republican party members. Florida governor Ron DeSantis called for a ban on CBDCs in his state last March, while Republican congress members Tom Emmer and Ted Cruz have tried introducing federal legislation to ban their implementation by the central bank.
Even some Democratic politicians, including former presidential candidates Tulsi Gabbard and Robert Kennedy Jr., have voiced concerns about the invasion of privacy that CBDCs could pose. The opposition to CBDCs reflects a growing concern over the government’s increasing surveillance of financial activities and the potential for abuse of that power.
The Future of CBDCs in North Carolina
Despite the unanimous vote in the House, the bill still needs to pass through the Senate and be signed into law by Governor Roy Cooper before it takes effect. If passed, the bill would make North Carolina the first state in the US to ban the acceptance of CBDCs by government entities.
The pushback against CBDCs is part of a larger conversation around the future of money and the role of government in financial transactions. As technology advances and new forms of digital currencies emerge, policymakers are grappling with how to regulate and control these currencies.
Banning Bitcoin Mining
In addition to the ban on CBDCs, North Carolina’s Buncombe County Board of Commissioners recently approved a one-year moratorium on Bitcoin mining. The decision was made over concerns about the noise and pollution created by these facilities.
The move reflects the growing concern over the environmental impact of Bitcoin mining, which requires a significant amount of energy and contributes to greenhouse gas emissions. The Biden administration has called for a 30% tax on the Bitcoin mining industry to make it pay for its societal harms.
Overall, the ban on CBDCs in North Carolina and the pushback against Bitcoin mining reflect a broader debate over the future of digital currencies and the role of government in regulating them. As these technologies continue to evolve, it is likely that the conversation will only become more complex and contentious.