In a decisive move, the legislative body of North Carolina, the General Assembly, endorsed a measure on Wednesday that curtails the state’s ability to engage with a digital currency issued by the Federal Reserve. The legislation, known as House Bill 690, is now on its way to Governor Roy Cooper’s desk for his signature, following a resounding approval in the House with a vote of 109-4 on June 26, just one day after the Senate’s 39-5 endorsement.
Should Governor Cooper ratify the bill, it will immediately prohibit state entities and judicial bodies from utilizing “central bank digital currency” for transactions. Additionally, the bill precludes these bodies from partaking in any pilot programs for such digital currencies conducted by Federal Reserve branches.
A notable section of North Carolina’s H.B. 690, as provided by the North Carolina General Assembly.
This legislative development coincides with a similar action taken by Louisiana’s Governor Jeff Landry earlier in the week, who enacted a comparable prohibition against the state’s involvement with central bank digital currencies. The Louisiana statute also safeguards the right of individuals to maintain direct control over their cryptocurrencies.
The overwhelming backing for North Carolina’s bill suggests that even if Governor Cooper were to veto it, the legislature could easily override his decision, given that more than three-fifths of the members in both houses support the bill. As of now, Governor Cooper’s office has not offered any comments regarding his intentions for the bill.
Jerome Powell, the Chair of the Federal Reserve, expressed at a Senate Banking Committee hearing in March that the United States is far from proposing or adopting any form of a central bank digital currency.
In related news, despite the Federal Reserve’s stance, the U.S. House recently passed legislation to prevent the Federal Reserve from introducing a central bank digital currency. This bill is now proceeding to the Senate for consideration.
A survey conducted by the Bank for International Settlements (BIS) on June 14 revealed that 94% of central banks are investigating the potential of a central bank digital currency. The BIS noted a significant increase in the number of experiments and pilot programs for wholesale central bank digital currencies. According to the BIS, it is more probable that a central bank will issue a wholesale digital currency, intended for financial institutions, rather than a retail version for the general public, within the next six years. However, the BIS acknowledged that many aspects of central bank digital currencies remain undetermined.
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