On Wednesday, North Carolina’s General Assembly passed a bill restricting any involvement with Federal Reserve-issued central bank digital currencies (CBDCs). The bill, which garnered overwhelming support with a 109-4 vote in the Senate, aims to prevent state agencies and courts from using or accepting CBDCs. Previously, the bill had received a 39-5 vote in favor. It now awaits Governor Cooper’s signature.
JUST IN: 🇺🇸 North Carolina Senate passes ban on Central Bank Digital Currency (CBDC) payments to the state.
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The NC General Assembly has passed an act prohibiting payments to the state using central bank digital currency. The legislation, HB 690, also prohibits North Carolina… pic.twitter.com/m4nhqjy0zJ
— DΛVID 🟢 (@DavidShares) June 26, 2024
North Carolina Resists Federal CBDC Initiatives
This proposed legislation marks North Carolina’s decisive stance against integrating CBDCs into state-level financial operations. By preventing state agencies and courts from participating in Federal Reserve CBDC tests and accepting CBDC payments, the state aims to resist perceived federal overreach. This move positions North Carolina as a defender against federal financial authority.
This cautious stance arises from concerns about privacy and excessive federal control. Critics argue that it could undermine state independence and personal privacy and diminish both state authority and individual rights.
The bill’s passage in North Carolina could set a precedent for other states considering similar measures. It underscores a growing skepticism within certain U.S. states about the implications of a federally controlled digital currency.
As the debate over digital currencies continues to evolve, Actions by states like North Carolina and Florida showcase the tension between financial tech innovation and concerns over privacy, state sovereignty, and financial stability. These measures reflect ongoing debates about modernizing finance while protecting traditional systems.
U.S. States Unite in Opposition to Federal CBDCs
North Carolina’s stance reflects a broader national conversation. Similarly, states like Florida are also moving to restrict CBDCs. Last year, Governor Ron DeSantis signed a similar bill, reinforcing the state’s opposition to digital currencies controlled by the Federal Reserve. At the federal level, the Senate is now reviewing a House bill to block the Federal Reserve from issuing a CBDC. Discussions on this legislation are ongoing.
Federal Reserve Chair Jerome Powell has indicated that the U.S. is not close to adopting such a currency, a sentiment echoed during a March Senate Banking Committee hearing. A recent Bank for International Settlements survey revealed widespread global interest in CBDCs. It found that 94% of central banks are currently investigating their potential.
Despite this global trend, the specifics of how CBDCs would function remain largely undecided, with a focus on wholesale CBDCs over retail versions. Debate and legislation regarding CBDCs create ongoing disputes in the U.S. and worldwide. These issues highlight significant concerns over privacy, regulatory impacts, and traditional financial systems.
US FASAB Reclassifies Seized Crypto as Non-Monetary Property
The US Federal Accounting Standards Advisory Board (FASAB) has updated its guidelines to categorize seized cryptocurrencies and similar digital assets as “non-monetary property.” This classification aims to standardize how these assets are reported and managed within government frameworks.
The update addresses the complexities and increasing prevalence of digital asset seizures by enhancing clarity and consistency across governmental agencies.FASAB clarified that digital assets do not possess the traditional characteristics required of monetary assets, such as serving as a unit of account, medium of exchange, or store of value. Therefore, these assets should not be recognized as currency in financial reports.
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