The North Carolina General Assembly has made a move that can only be defined as bold in the current times. It has passed a bill that bars the Government from executing CBDC across the state. House Bill 690 received the support of 27-17 to override the veto of the Democrat Gov. Roy Cooper. A specific reason is not yet known, but Senator Brad Overcash said that it was time to send a signal that North Carolina would not be interested if the Federal Government ever decides to bring CBDCs to the region.
While interacting with the media, Brad also emphasized that NC was the 9th largest state in the US.
All Republican senators voted to override the veto, while Democrats did not extend any support this time. They had voted in June, thereby forcing Overcash to highlight the politics surrounding it. Overcash said that the veto process was a purely political move by those who voted after they saw Roy Cooper do the same. He added that it was unfortunate and highlighted the importance of making one’s own decisions rather than following a political leader.
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The bill was previously approved by the General Assembly by 39-5 at the end of June, and by the House by 109-4. It was later vetoed by Cooper. Cooper overrode this, resulting in the bill becoming law. North Carolina has statutorily restricted itself from participating in digital currency schemes that are sponsored by the Federal Reserve.
This is a bold move because the time belongs to digital currency, and CBDCs have a better chance of making the transition securely. They are pegged to fiat currencies and fall under relevant authorities. Therefore, they guarantee the safety of digital currency holders’ funds and transactions.
Its value is further enhanced by its association with fiat currencies, which enables it to sustain lower fluctuations. This is not the case for Bitcoin, Ethereum, and other cryptocurrencies that are not pegged to fiat currencies. Their values fluctuate every minute, making it difficult for holders to realise the value of their holdings. It also means that funds deposited with an exchange platform stand a chance to come out with a lower value if the market ever declines.
CBDC, on the other hand, remains as it is, with little to no difference to its value. Holders get the same amount back that they had deposited.
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Currently, North Carolina is the sole state that has enacted a law prohibiting its citizens from engaging in a digital currency program that is administered by the Federal Government. There has been no update on whether another state is following this trend. Chances are, a couple of states could pick up the heat, especially since US elections are just around the corner. Presidential candidates, as well as other members of their campaigns or political parties, would pick up on the smell.
