North Carolina has joined Florida in passing legislation that would ban the use of central bank digital currency (CBDC) payments and prevent the state from participating in any testing. Proponents of CBDCs argue that they can reduce costs, decrease friction in cross-border payments, and deter counterfeiting.
However, critics are concerned about the potential infringement of personal privacy, centralization of power, and security breaches. Former US government official Catherine Fitts has gone as far as to call CBDCs a “financial transaction control grid” and warned against the centralization of assets.
Senator Ted Cruz has also introduced legislation to prohibit the development of a digital dollar, citing the potential stifling of entrepreneurship, innovation, and freedom. With North Carolina and Florida’s laws in place, some believe that the fight against CBDC is being won.
CBDC controversy
CBDCs have been a topic of controversy in recent years, with supporters touting their potential benefits and opponents warning against their potential risks. While it can provide advantages such as increased efficiency and reduced costs, there are concerns that it could lead to a loss of privacy and give central authorities too much control over financial transactions.
These concerns have led some states to take action against the development and use of CBDCs. Florida Governor Ron DeSantis has announced legislation to protect residents from what he calls the “weaponization of the financial sector” through it.
Despite these legislative efforts, there are still those who support it and believe they have a role to play in the future of money. The Federal Reserve’s FedNow instant payment service, which is set to launch in July, has been seen as a precursor to the digital dollar system. However, with states such as North Carolina and Florida pushing back against CBDCs, it remains to be seen how widespread their adoption will be in the future.
