South Dakota Gov. Kristi Noem emphatically vetoed a measure that would have classified central bank digital currency (CBDC) as money. The sweeping measure would have excluded cryptocurrencies such as Bitcoin and others.
In turn, Noem wrote to the South Dakota House of Representatives that the statue “opens the door to the risk that the federal government could more easily adopt a CBDC.”
That, she said, would result in Washington controlling the only viable digital currency. This is something that has been considered by the Federal Reserve for several years as it contemplates adopting a digital dollar.
The vetoed bill would have classified money as a “medium of exchange that is currently authorized or adopted by a domestic or foreign government.”
This would mean that cryptocurrencies currently in use would not be considered money. Doing that, according to Noem, would “needlessly” limit freedoms and put U.S. citizens at a “business disadvantage” by delegitimizing the crypto industry.
I VETOED HB 1193. This bill adopts a definition of ‘money’ to specifically exclude crypto like Bitcoin. And it opens the door to the risk that the federal government could adopt a Central Bank Digital Currency.
South Dakota will always stand for Economic Freedom. pic.twitter.com/yqN2mPPaLj
— Kristi Noem (@KristiNoem) March 10, 2023
Whether her veto will stand is another matter.
The South Dakota House passed the measure with a 49-17 vote, and the Senate followed suit by a 24-9 margin. Both tallies are easily within range to overturn the veto in both chambers.
There was little opposition to the measure as it sailed through both chambers, but that may change with the popular governor’s veto. As Noem argued, her state “should not open the door to a potential future overreach by the federal government.”
One of her allies is Republican Rep. Julie Auch of Yankton. She noted that she ran into a brick wall trying to get assistance to kill the bill in the Senate. It was then that she turned to the governor with hopes of derailing the measure.
Auch said the bill potentially gives too much power to “South Dakota, the federal government, or the people in charge of our money.” Not only will they be allowed to track your money, they may deny access to it.
Without Noem’s veto, South Dakota would have been the first state to pass the update to the Uniform Commercial Code (UCC).
This is normally routine legislation to ensure banking practices are standard across the nation. However, legitimate concerns by civil libertarians and others prompted Noem to wield her veto power and stop the banking measure.
At this point it would be advisable for South Dakota lawmakers to take a closer look at why their governor is so alarmed about the change. Anything in 2023 that spawns yet more overreach from Washington deserves better than just a passing glance.