Several bills challenging the classification of central bank digital currency (CBDC) as “money” have emerged in multiple U.S. states, potentially creating obstacles for the implementation of CBDCs in the country. Lawmakers in Utah, South Carolina, South Dakota, and Tennessee have introduced bills seeking to exclude CBDCs from the legal definition of money.
In Tennessee, State Senator Frank Niceley presented a bill to the Senate on January 12. The proposal aims to amend the Tennessee Uniform Commercial Code (UCC) by explicitly stating that “money” does not encompass any central bank digital currency, thereby potentially hindering the integration of CBDCs within the state’s financial framework.
Utah’s House of Representatives witnessed the introduction of House Bill 164 by Representative Tyler Clancy on January 4. This bill defines CBDC as a digital form of money issued by government entities such as the U.S. Federal Reserve, foreign governments, and central banks. The proposed legislation specifies that CBDC is not considered specie legal tender and is not deemed legal tender within the state, altering the state’s definition of money under the Utah Specie Legal Tender Act and UCC.
In South Carolina, State Senator Shane Martin filed Senate Bill 861 on November 30, 2023, which seeks to modify the state’s UCC definition of money to explicitly exclude central bank digital currency.
Meanwhile, South Dakota’s Senate Committee on Commerce and Energy, at the request of the Department of Labor and Regulation, introduced Senate Bill 58 on January 9. This legislation proposes that the term “money” in the state’s UCC should not include any central bank digital currency.
This trend echoes similar legislation recently enacted in Florida, where Governor Ron DeSantis signed a bill restricting the use of CBDCs in the state. The Florida law also prohibited the use of CBDCs issued by foreign governments, encouraging other states to implement comparable restrictions through their commercial codes. The collective impact of these bills across multiple states could pose significant challenges to the development and acceptance of CBDCs in the United States.