South Dakota vetoes crypto-money law

The governor of South Dakota, Kristi Noem, used her power to veto a bill that would have taken cryptocurrencies out of the definition of money.

House Bill 1193 suggested altering the state’s Uniform Commercial Code, or UCC, to expressly prohibit cryptocurrencies and other digital assets, with the possible exception of central bank digital currencies, or CBDCs.

According to the governor, adoption of the measure would place South Dakotans “at a disadvantage in the corporate world” and might permit “future overreach” by the federal government in the issuance of a digital dollar.

“By explicitly banning cryptocurrencies as money, their usage would become more difficult,” said Noem.

“HB 1993 introduces the possibility that the federal government may more readily accept a CBDC, which could then become the sole viable digital currency. It would be unwise to establish rules for something that does not yet exist.”

Conservative campaigners supported efforts to have Noem veto the bill, citing financial liberty concerns.

The organization Club for Growth wrote a letter to the governor of South Dakota, pushing her to oppose the measure and comparing a U.S.-issued CBDC to China’s digital yuan.

The South Dakota Freedom Caucus, an organization of Republican state legislators, praised Noem’s actions.

Under the proposed UCC amendment, money would be defined as “a medium of exchange that is currently approved or adopted by a domestic or foreign authority.”

“An electronic record that is a medium of exchange recorded and transferable in a system that existed and functioned for the medium of exchange before the medium of exchange was authorized or adopted by the government,” asserts analysts.

While China’s central bank has been conducting trials for the CBDC since April 2020, the U.S. gouvernment is currently investigating the possible advantages and hazards of releasing a digital currency.

Similar to the opposition to the South Dakota measure, there has been opposition to CBDCs at the federal level.

Congressman Tom Emmer of Minnesota sponsored legislation in February aimed at restricting the Federal Reserve’s control over a CBDC.