Legislation has been introduced in the American state of South Dakota to amend the Uniform Commercial Code (UCC) to limit the definition of money to exclude cryptocurrencies. Central bank digital currencies (CBDCs) would still be considered money under the proposed new definition.
The 117-page amendment, introduced into the state House of Representatives by Republican Mike Stevens, defines “money” as “a medium of exchange that is currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries.” The bill continues:
“The term does not include an electronic record that is a medium of exchange recorded and transferable in a system that existed and operated for the medium of exchange before the medium of exchange was authorized or adopted by the government.”
Notably, CBDC falls within the proposed definition of money, unlike cryptocurrency. It received a sharp reaction from the head of the conservative State Freedom Caucasus Network, Andy Roth.
Related: United States CBDC would ‘crowd out’ crypto ecosystem: Ex-Biden adviser
The South Dakota bill contrasts with the “CBDC Anti-Surveillance State Act” recently introduced into the U.S. House of Representatives by Minnesota Republican Tom Emmer, who is considered a proponent of cryptocurrency.
This is a huge deal. The UCC is creating the framework for CBDCs to be accepted (and #bitcoin denied) via Amazon and all other retailers. All digital transactions.— Andy Roth (@andyroth) March 2, 2023
This must be stopped. The good news is that we still have a chance to kill this in the 49 other states. https://t.co/lUhcjsN11D
The UCC introduced the concept of “controllable electronic records” in amendments approved in July meant to regulate digital assets at the state level. The new articles of the UCC also treat cryptocurrencies and CBDCs separately. The United States does not have a CBDC, although a “digital dollar” is the subject of research within the U.S. government and other groups, such as the Digital Dollar Project.
Juliette Moringiello, a member of the U.S. Uniform Law Commission and American Law Institute joint committee that finalized the changes to the UCC, told Cointelegraph before its completion that changes to the UCC “create giant choice-of-law problems, and if any company or any person with crypto ends up in bankruptcy, a bankruptcy court wouldn’t know what law to apply.”
The proposed law would go into effect on July 1, 2024, if passed.