South Dakota is taking action to modify the definition of money, specifically digital currencies. The proposed legislation, named “An Act to amend provisions of the Uniform Commercial Code,” suggests that the state should not consider digital currencies such as Bitcoin as money since they are not issued by governments but rather by organizations or individuals.
Only Government Recognized Means Of Exchange Are Money
Per the proposed amendment, the state will only consider a medium of exchange as money if a government has officially “authorized or adopted” it. According to the bill, “money” refers to a medium of exchange that a local or foreign government has approved or officially recognized.
“This definition also encompasses a monetary unit of account that has been created by an intergovernmental firm or when two or more nations agree,” the legislation added.
In addition, the bill said, “the definition does not encompass an electronic record that functions as a medium of exchange and is recorded and transferable within a system that was in existence and operational before the government adopted or authorized it.”
According to Dennis Porter, the creator of Satoshi Fund, the passage of this bill will pave the way for creating a central bank digital currency (CBDC). Notably, Satoshi Fund is a firm that strives to educate regulators and policymakers about Bitcoin.
Porter shared his thoughts on the bill via Twitter, expressing that it aims to create a network of pro-CBDC states throughout the U.S. He also noted that the policy appears to be geared towards constructing a barrier against digital assets like Bitcoin by excluding them from the definition of money in these states.
CBDC Faces Criticism
“The most troubling aspect of this is that lawmakers are promoting the policy in 21 different states across the U.S.,” Porter added. Andy Roth, the State Freedom Caucus Network President, echoed similar concerns about the bill, cautioning that it could establish a precedent for disallowing Bitcoin usage.
Meanwhile, the state of South Dakota is among numerous other regions in the U.S. striving to establish regulations for digital currencies. One approach numerous officials have proposed is the introduction of CBDCs.
They believe CBDCs will help to curb the influence of privately issued digital assets. Although CBDCs have gained attention as a potential innovation in the financial sector, some critics contend that they are simply a means for governments to monitor their citizens.
Recently, a United States Congressman, Tom Emmer, put forth a new bill to prevent the Federal Reserve from launching a CBDC. He argues that such legislation is necessary to safeguard citizens’ financial privacy.
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