The state of South Dakota is making moves seeking to redefine what constitutes money, with a keen interest on classifying cryptocurrencies.
The bill titled ‘An Act to amend provisions of the Uniform Commercial Code‘ indicates that digital currencies such as Bitcoin (BTC) would be excluded from defining money since they originate from individuals or organizations.
According to the proposed amendment, a possible medium of exchange would be identified as money only if it’s ‘authorized or adopted’ by a government.
“Money means 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 adds:
“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.”
Giving room for CBDCs
Commenting on the bill, Dennis Porter, the founder of Satoshi Fund, an organization dedicated to educating lawmakers and regulators on Bitcoin, stated that if the law is passed, it will give way to establishing a central bank digital currency (CBDC).
In a tweet on March 2, Porter stated that the bill is pushing for establishing pro-CBDC states in the U.S.
“The worst part about this is there is an attempt to push this policy in 21 different states across the USA. There is seemingly a goal to build a bull work of pro-CBDC states that also exclude digital assets like Bitcoin from the definition of money,” he said.
Similarly, Andy Roth, President of the State Freedom Caucus Network, warned that the bill is setting a precedent for Bitcoin to be disallowed in transactions.
South Dakota’s move is one of many similar attempts being made across the United States as lawmakers grapple with how to regulate digital currencies. As part of offering a regulatory outlook, CBDCs have been fronted to curb the influence of private digital assets.
However, critics of CBDCs have argued it’s a ploy for the government to survey citizens. In this regard, as reported by Finbold, United States Congressman Tom Emmer introduced a new bill seeking to block the Federal Reserve (the Fed) from issuing a CBDC. He argued that the legislation aims to preserve citizens’ financial privacy.