Louisiana Blocks Central Bank Digital Currencies with New Law

Lawmakers in Louisiana have revised a bill to ban the use of central bank digital currencies (CBDCs) and set regulations for node operators and miners. The updated law, called the Blockchain Basics Act, will take effect in August 2024.

The Blockchain Basics Act prohibits Louisiana from testing and requiring payments using CBDCs. The act explicitly states, “A governing authority shall not participate in any test of central bank digital currency by the Board of Governor.” This law does not restrict other forms of digital currency, allowing them to be used freely within the state.

Regulation of Digital Asset Mining

The law also imposes strict regulations on foreign-owned digital asset mining companies. Starting August 1, 2024, foreign-owned businesses must completely divest their interests in digital asset mining within one year. Failure to comply can result in fines of up to $1 million or 25% of the foreign company’s investment in the operation.

Louisiana’s stance on digital currencies mirrors actions taken by other states. North Carolina and Florida have also passed laws to limit or prohibit CBDC use, reflecting a growing trend of skepticism towards a digital US currency.

CBDCs face significant opposition among presidential candidates. Donald Trump has expressed concerns about government intervention and surveillance related to CBDCs. On the other hand, President Biden appears open to exploring the possibilities of CBDCs, despite resistance from some US senators who oppose the launch of a digital dollar.