In a recent revelation, Kristi Noem, the governor of South Dakota, used her powers to veto the proposed legislation that intended to change the definition of money to exclude cryptocurrencies.
The governor issued a notice to Hugh Bartels, South Dakota House Speaker announcing her verdict. In the notice dated March 9, Noem wrote that she is vetoing House Bill 193, which proposed amending the state’s Uniform Commercial Code (UCC). The UCC is a uniform law that governs commercial transactions, including sales of goods, secured transactions, and negotiable instruments.
As discussed by the lawmakers, the proposed amendment intended to exclude cryptocurrencies and other digital assets with the possible exception of central bank digital currencies (CBDCs).
Under the proposed UCC amendment, money would be defined as “a medium of exchange that is currently authorized or adopted by a domestic or foreign government.” To this, experts diverted attention to the wording of the bill, which excluded many digital assets, and said that would not apply to CBDCs. It stated:
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.
According to the governor, the passage of the bill would put the state and its residents at “a business disadvantage” and potentially facilitate “future overreach” from the federal government in issuing a digital Dollar. In her words:
By expressly excluding cryptocurrencies as money, it would become more difficult to use cryptocurrency. HB 1993 opens the door to the risk that the federal government could more easily adopt a CBDC, which then may become the only viable digital currency. […] It would be imprudent to create regulations governing something that does not yet exist.
Several organizations wanted the governor to veto the legislation, raising concerns about financial freedom. Todayq News reported that the conservative American non-profit economic organization Club for Growth penned a letter to the South Dakota governor urging her to oppose the bill.
This bill had drawn criticisms from several notable figures including Dennis Porter, founder of Satoshi Fund. He commented on the bill, stating that it could give way to a CBDC, while Andy Roth, President of the State Freedom Caucus Network, warned that it sets a precedent for disallowing Bitcoin in transactions.
Lawmakers in the United States have been divided on the issue of crypto regulation and this bill was one of the many ongoing efforts around the nation. Given the authority that lies with respective states, there has been significant confusion around the topic. While some states like Nevada, Wyoming, and Texas, have been more pro-Crypto, other regions like New York have been stricter. Hence, it would be interesting to see how the final crypto regulations come out amidst all the challenges that lawmakers and regulators would have to address.