States Propose Bills to Exclude Central Bank Digital Currency from Definition of Money
Summary:
Legislation has been introduced in Utah, South Carolina, South Dakota, and Tennessee that opposes classifying central bank digital currency (CBDC) as money. The proposed bills aim to exclude CBDC from the state-level definitions of money, potentially hindering its acceptance. Similar laws already exist in Florida. These collective moves underscore national apprehension towards the adoption and classification of CBDCs across various states.
Legislation opposing the categorization of central bank digital currency (CBDC) as money has been introduced in Utah, South Carolina, South Dakota, and Tennessee. These bills propose that a CBDC should be excluded from the state's definition of money, which could hinder its acceptance in those particular states. Sen. Frank Niceley put forth the bill to the Tennessee Senate on Jan. 12. The Tennessee Uniform Commercial Code (UCC) defines "money" as a recognized means of exchange. Though, the contemplated bill aims to modify this definition to explicitly exclude any central bank digital currency.
The UCC is a wide-ranging group of standardized laws that regulate commercial transactions throughout the United States, providing consistency for business operations across various states.
In Utah, Rep. Tyler Clancy submitted House Bill 164 on Jan. 4. This potential bill portrays a central bank digital currency as a digital variant of money, supplied by governmental groups such as the U.S. Federal Reserve, foreign governments, central banks, or reserve systems, and confirmed by these organizations.
The envisioned Utah CBDC legislation would state that "a central bank digital currency does not constitute legal specie tender and is not accepted as legal tender in the state," effectively removing CBDC from the legal tender category defined by the Utah Specie Legal Tender Act and the state's UCC.
South Carolina's Sen. Shane Martin introduced Senate Bill 861 on Nov. 30, 2023. Similar to Tennessee's UCC, South Carolina's UCC identifies "money" as a sanctioned medium of exchange. Yet, the suggested bill S861 plans to integrate the phrase "does not include any central bank digital currency" into that explanation.
Upon the direction of the South Dakota Department of Labor and Regulation, the chair of the Committee on Commerce and Energy pushed for the introduction of Senate Bill 58 (SB58) on Jan. 9. Contrary to the South Dakota UCC, this bill proposes to incorporate the statement that money "does not include any central bank digital currency" in its interpretation.
Comparable laws have already been distinctly enacted in Florida, where Gov. Ron DeSantis signed a bill indirectly limiting the use of CBDCs across the state. This legislation also outlawed the usage of CBDCs issued by foreign states and urged other areas to apply equivalent restrictions within their commercial codes.
Published At
1/17/2024 11:30:07 AM
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