Several states in the United States are actively proposing bills to exclude central bank digital currencies (CBDCs) from their legal definition of money. This movement could present significant challenges to the adoption and implementation of CBDCs in the country.
State Senator Frank Niceley introduced a bill in the Tennessee Senate on January 12. This bill aims to amend the Tennessee Uniform Commercial Code (UCC) to explicitly state that CBDCs do not qualify as money. The UCC is a set of laws that standardize commercial transactions across the United States.
In Utah, Representative Tyler Clancy introduced House Bill 164 on January 4. This bill defines CBDCs as digital currencies issued by government entities like the U.S. Federal Reserve or foreign central banks. The bill seeks to clarify that CBDCs are neither specie legal tender nor legal tender in Utah, as per the Utah Specie Legal Tender Act and the state’s UCC.
South Carolina State Senator Shane Martin filed Senate Bill 861 on November 30, 2023. Similar to the Tennessee bill, this legislation proposes to amend the state’s UCC to exclude CBDCs from the definition of money.
In South Dakota, Senate Bill 58 was introduced on January 9 at the request of the Department of Labor and Regulation. This bill also seeks to amend the state’s UCC to state that CBDCs do not constitute money.
Florida has already enacted similar legislation. Governor Ron DeSantis signed a bill that not only restricts the state’s use of CBDCs but also prohibits the use of CBDCs issued by foreign governments. The bill encourages other states to use their commercial codes to implement similar restrictions.
These legislative efforts reflect a growing skepticism and caution among some U.S. states regarding the role and definition of CBDCs. By excluding CBDCs from the legal definition of money, these states are setting a precedent that could impact the future development and acceptance of digital currencies issued by central banks, both domestically and internationally. This movement also highlights the diverse approaches and attitudes towards financial innovation and regulation across different states in the U.S.
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