Multiple US Senate bills object to CBDC's definition of ‘money’

Bills in Utah, South Carolina, South Dakota, and Tennessee aim to exclude central bank digital currencies from being defined as money in each state, posing obstacles to CBDC use.
Bills in Utah, South Carolina, South Dakota, and Tennessee aim to exclude central bank digital currencies from being defined as money in each state, posing obstacles to CBDC use.

Bills against referring to a central bank digital currency (CBDC) as money have been filed in the states of Utah, South Carolina, South Dakota, and Tennessee. The bills would exclude a CBDC from the definition of money and could create significant roadblocks to a CBDC in the United States.

State Senator Frank Niceley introduced a bill to the Tennessee Senate on Jan. 12. According to the Tennessee Uniform Commercial Code (UCC), money is an authorized medium of exchange. However, his proposed bill would add the term “does not include any central bank digital currency” to that definition.

Screenshot of the Tennessee CBDC bill. Source: LegiScan

The UCC is a comprehensive set of standardized laws governing commercial transactions within the United States. It provides a consistent framework for business dealings and transactions across different states.

In the Utah House of Representatives, Representative Tyler Clancy introduced House Bill 164 on Jan. 4. The proposed bill describes central bank digital currency as a digital form of money issued by government entities like the U.S. Federal Reserve, foreign governments, central banks or reserve systems, directly accessible or verified by these entities.

Screenshot of the Utah CBDC bill. Source: LegiScan

The proposed Utah CBDC bill would specify that “a central bank digital currency is not specie legal tender and is not legal tender in the state,” effectively excluding CBDC from the state’s definition of money under the Utah Specie Legal Tender Act and the state’s UCC.

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South Carolina State Senator Shane Martin filed Senate Bill 861 on Nov. 30, 2023. Like Tennessee, South Carolina’s UCC defines money as an authorized medium of exchange. However, the proposed bill S861 would add that the term “does not include any central bank digital currency” to that definition.

In South Dakota, the Department of Labor and Regulation requested the chair of the Senate Committee on Commerce and Energy introduce Senate Bill 58 on Jan. 9. The legislation adds that money “does not include any central bank digital currency” to its definition in the state’s UCC.

Similar legislation has already been signed as law in Florida. Florida Governor Ron DeSantis signed a bill restricting the state’s use of CBDCs. It also banned using CBDCs issued by foreign governments and called on other states to use their commercial codes to institute similar prohibitions.

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