United States Lawmakers Introduce Bills to Exclude CBDCs from the Definition of Money

Several US Legislators Propose Bills to Prohibit Defining Central Bank Digital Currency (CBDC) as Legal Tender

US lawmakers have proposed bills to remove CBDCs from being classified as money.

📅 Last updated: January 17, 2024 05:45 EST | 🕒 Read time: 2 min

Image: David Pokima

United States lawmakers have proposed bills in four states to block possible definitions of a Central Bank Digital Currency (CBDC) as money.

The bills were introduced in South Carolina, South Dakota, Tennessee, and Utah as anti-CBDC legislators seek to prevent the use of CBDC tokens in those states as the wider industry debate with digital currencies continues.

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Defining a Specie Legal Tender 🤔

Rep. Tyler Clancy introduced the bill in the Utah Senate on Jan 4 that will block the use of a CBDC in the state, removing it from the definition of a legal tender.

The bill aims to establish a clear legal framework around the use and acceptance of specie legal tender in the state. While other rules by the Federal Reserve or foreign governments may include CBDCs as a form of legal tender to be used together with fiat, the law takes a different position.

“… a central bank digital currency is not a specie legal tender in the state.”

This bill sets a precedent for future discussions regarding the status of CBDCs and their inclusion in the definition of money.

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South Dakota Joins the Resistance ✊

On Jan 9, a similar bill was introduced in South Dakota, which expressly states that money does not include any central bank digital currency. The bill sponsored by the Chair of the Committee on Commerce and Energy joins the list of CBDC restrictive provisions.

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Tennessee Draws the Line 🛑

In Tennessee, Sen Frank Niceley filed the bill in the state senate on Jan 12 adding that the definition of money does not stretch to central bank digital currencies in the state. Per the bill:

“Money is a medium of exchange authorized and adopted by a domestic or foreign government… does not include central bank digital currency.”

This bill aims to solidify the distinction between traditional forms of money and CBDCs, providing a clear definition within the legal framework.

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Bitcoin versus CBDCs – A Heated Debate 🔥

The debate between CBDCs and private cryptocurrencies has dominated the digital asset spaces for years, with pro-Bitcoin analysts and politicians criticizing possible government adoption. It is important to note that CBDCs are not stablecoins in the sense that USDC and USDT are, for example. This is why many crypto enthusiasts are vocal against central bank digital currencies and CBDC news and instead push for cryptocurrencies like Bitcoin.

Last year, Joe Rogan and Post Malone criticized the idea of deploying a CBDC in the United States, calling it “Game Over” for the average citizen.

Image: Joe Rogan and Post Malone

Stressing more government control, a reason widely expressed by critics, Rogan noted that authorities could track citizens and behavioral patterns from social media.

Florida Governor Ron DeSantis signed a law that prevents the use of CBDCs in the state to protect personal finances from “government overreach and woke corporate monitoring.” He has also pledged to ban possible CBDCs should he get elected as President and tackle Biden’s anti-crypto policies.

In Argentina, pro-Bitcoin President Javier Milei opposed plans by Economy Minister Sergio Massa to roll out a CBDC.

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🔮 Future Outlook and Expert Analysis

The introduction of these bills in multiple states reflects the ongoing debate and concern surrounding the adoption and use of CBDCs. It’s clear that different jurisdictions hold varying opinions on the status of CBDCs and their classification as money.

It is essential for policymakers, economists, and regulators to carefully analyze and assess the potential impact of CBDCs on financial systems, privacy, and government control. The coming years will likely see further discussions, research, and testing of CBDCs as countries navigate the path towards a digital future.

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Q&A: What Readers Are Asking 🤔

Q: What is the purpose of these bills? These bills aim to prevent the use of Central Bank Digital Currency (CBDC) as money in certain states, highlighting concerns over government control and potential privacy infringements.

Q: How do CBDCs differ from stablecoins like USDC and USDT? CBDCs are not considered stablecoins. Unlike stablecoins, which are pegged to a specific underlying asset, CBDCs are directly issued by central banks and are part of the official monetary system.

Q: How will the introduction of these bills impact the future of CBDCs? These bills reflect the differing opinions and concerns surrounding CBDCs. They may lead to further debates and discussions about the role and regulation of CBDCs in the future.

Q: What are the arguments against CBDCs? Critics argue that CBDCs could enable greater government control and surveillance, infringing on individual privacy. They also highlight the potential risks and challenges associated with integrating CBDCs into existing financial systems.

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📚 Reference List

1. Digital Currency Group Settled $1 Billion Debt, Including $700 Million Owed to Bankrupt Genesis
2. Senator Thom Tillis Adds Voice to Opposition of Warren’s Anti-Crypto Bill
3. BlackRock CEO Doubts Bitcoin Will Ever Become a Currency
4. Morgan Stanley: Bitcoin and CBDCs Threaten US Dollar’s Dominance as Global Currency
5. FTX Debtors Propose $16,871 Bitcoin Price in Creditor Claims

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Now that you’re up to speed on the latest developments, what are your thoughts on the exclusion of CBDCs from the definition of money in certain states? Share your opinions in the comments below and don’t forget to like and share this article to spread the word!

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Disclaimer: The above article is for informational purposes only and does not constitute financial advice. Please do your own research before making any investment decisions.

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