The U.S. state of North Carolina has passed a bill that forbids state agencies and institutions from receiving payments in the form of a central bank digital currency (CBDC) issued by the Federal Reserve (Fed), the U.S. central banking system.
The state's House of Representatives voted 118-0 in favor of the legislation.
- The bill bans state agencies from accepting payments in the long-awaited digital dollar.
- The legislation also prevents North Carolina from participating in any pilot tests of the CBDC.
- The bill was first introduced in April under the title "No Cryptocurrency Payments to State."
- U.S. President Joe Biden signed an executive order last year for the federal government to explore the potential use cases and risks of a CBDC.
- Despite the increased number of countries exploring or piloting CBDCs, there has been a growing criticism towards state-backed digital currencies among several U.S. lawmakers over the last several months.
- In March, Florida Gov. Ron DeSantis proposed a law to ban the use of a CBDC as money in the state, citing the risks of hindering innovation and promoting government surveillance.
- Sen. Ted Cruz from Texas also recently introduced a bill to prevent the Fed from developing a CBDC, citing the risk that these digital assets could be used as a direct surveillance tool by the government and violate the privacy rights of American citizens.