New law wants to exclude Bitcoin from the definition of money

The state of South Dakota wants to pass a bill that would redefine the properties of money, preventing cryptocurrencies, including Bitcoin, from becoming legal tender.

The bill was introduced by Mike Stevens, state representative, under the title “An Act to amend provisions of the Uniform Commercial Code”, approved by 24 members of the Senate.

According to the bill, only mediums of exchange that have received state approval or adoption can be considered money. Cryptocurrencies, under this definition, are not money since they were issued by individuals or organizations.

“The term does not include an electronic record that is a medium of exchange registered and transferable in a system that existed and operated for the medium of exchange before the medium of exchange was approved or adopted by the authorities.” bill highlighted.

Protect Bitcoin holders

The bill quickly caught public attention after Dennis Porter, CEO and co-founder of the Satoshi Action Fund, broke the news on Twitter. He also noted that the state was pushing in 21 other US states.

The potential goal of this move, according to Porter, could be to create a safe path for CBDC adoption.

Porter and some crypto members warned that the proposal, if passed, could pose a threat to cryptocurrency.

Is a CBDC risk-free?

Cryptocurrencies have emerged as a new investment trend worldwide. However, the current digital currencies are not officially issued and recognized by governments and thus are not protected by the authorities when problems arise.

Amid the urgent demand for solutions, the central bank digital currency (CBDC) emerged as one of the most accepted and practical alternatives. However, using CBDC in actual transactions is still a complicated and difficult process.

That explains why only a select number of nations have any real interest in launching this currency. When it comes to CBDCs, several countries are adopting a very cautious strategy.

However, the path towards completely replacing paper money with CBDC is quite challenging and requires a significant amount of time. The US, on the other hand, has previously stated that the digital dollar is intended to coexist with fiat currency rather than completely replace it.

The viability of a CBDC depends not only on its design and infrastructure but also, most obviously, on its acceptance by the general public.

Especially in the case when this is an alternative to fiat money, an error in the issuance process resulting in the creation of a loophole can have unexpected consequences.

Another issue raised, which is also a pressing issue for the authorities, is the question of how to find a balance between the variables related to people’s privacy while controlling the factors related to transparency in CBDC transactions.

Evolution is natural

The growing openness to the idea of ​​decentralized currencies can be somewhat frightening. Like pushing yourself out of a zone that has existed for five decades – the zone may not be safe, but that’s what it’s called.

In 2021, El Salvador entered monetary history when the country adopted Bitcoin as legal tender. The move made El Salvador a vanguard to step out of the zone and recognize the biggest cryptocurrency money.

The case of El Salvador is not big enough to become a catalyst. The question of whether the country’s authorities will fail or succeed in the bold move remains in the future.

At the same time, debates are ongoing in other countries. In the United States, the controversies become more complex. But not every state in the US has built a solid wall against crypto. Some states like Texas, New Hampshire and Montana are known for their support of Bitcoin.

People are free to choose what they define money as, but they cannot stop evolution.