According to local media reports, Ron DeSantis, the governor of Florida has signed a bill seeking to restrict the use of central bank digital currencies (CBDCs) in the state. Reportedly, the governor urged state lawmakers in March to draft the bill.
Sources reveal that the bill the governor signed introduced changes to the state’s current commercial code. It prohibits the use of a United States federal CBDC i.e. the digital Dollar “as money within Florida’s Uniform Commercial Code (UCC).”
Additionally, it bans the use of CBDCs issued by foreign governments. The lawmakers via this law also urge other states to use their commercial codes to institute similar prohibitions on the use of CBDC. The law takes effect on July 1.
At the signing ceremony for the bill, DeSantis said he was spurred into action by the U.S. President Joe Biden’s administration’s studies of the new financial technology. He added that the United States does not have a CBDC and there are no current plans to introduce one. Quoting him:
I don’t think they would have done that if they didn’t intend on implementing this. Were a U.S. CBDC to be issued, it would be a massive transfer of power from consumers to a central authority.
Further, DeSantis also opined that the potential introduction of a CBDC could prove to be a threat to cryptocurrencies. As per him, the government wants ”to crowd out and eliminate other types of digital assets like cryptocurrency because they can’t control that, so they don’t like that.”
Referring to a clause the proposed Article 12 of the UCC before state legislatures, DeSantis stated that the government started a movement among the states to add CBDC to their Uniform Commercial Codes even though that was pushed by a lot of powers that be to do that. He added:
We looked at that and said, ‘[…] We are not going to add the central bank digital currency to our commercial code,’ but we also said, ‘[…] We need to add protections for Floridians against this,’ and so we’ll put in the Uniform Commercial Code that CBDC is something we don’t recognize.
John Montague, a Florida-based lawyer, briefed the media that this bill suggests that CBDC transactions won’t be afforded the usual UCC protections. He added “The UCC can establish obligations and alter third-party rights, even without their direct contractual involvement. Florida has the authority to alter this definition.”
As the scope of CBDCs expand in recent times, lawmakers in the United States are intensely engaging in discussion related to it. On one hand, the Biden administration has developed policy objectives for a possible CBDC system in the U.S., with the Federal Reserve and Treasury Department both conducting research in the area, some lawmakers have consistently criticized the idea.
In a media interaction a few days ago, DeSantis had aggressively criticized the adoption of CBDCs. He highlighted the problems that a CBDC brings with itself including independence and the power to make financial decisions. He said that “Florida rejects the idea of a CBDC” and had hinted at legislation that could be on his desk within “the next couple of weeks,” referring to the newly signed law.
However, Florida is not the only state to completely stand against the adoption of CBDC in the state. A few days back, North Carolina’s House of Representatives unanimously passed a bill that seeks to prevent the state’s agencies and institutions from accepting payments in CBDCs. The bill also bans the state from participating in any pilot tests CBDCs.
Notably, considering the political divide, lawmakers in the US have always presented contradictory views on topics surrounding the legislation. However, in the case of CBDCs, there is some common ground even though it’s minimal from Democrats.