South Dakota governor Kristi Noem has vetoed House Bill 1193. The bill changes the definition of money to exclude cryptocurrencies like Bitcoin and includes support of a central bank digital currencies (CBDC).

In a March 10 tweet, Noem claimed the bill “opens the door to the risk that the federal government could adopt a central bank digital currency.”

She added that South Dakota will always stand for Economic Freedom.

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

Governor Says Bill Puts Citizens at a Disadvantage

In a letter to South Dakota House Speaker Hugh Bartels, Noem wrote that excluding crypto assets like Bitcoin limits the freedom of the state’s citizens. She added that the bill put businesses in the state at a disadvantage.

The governor further said including CBDCs “opens the door to a potential future overreach by the federal government.”

Noem also added,

“At this moment in time, such a government-backed electronic currency has not been created. It would be imprudent to create regulations governing something that does not yet exist.”

I have returned HB 1193 with my VETO.

The bill adopts a definition of “money” to specifically exclude cryptocurrencies. But these revisions do include Central Bank Digital Currencies as money.

These developments concern me for several reasons, which are found in this letter: pic.twitter.com/3eqzdI80if — Governor Kristi Noem (@govkristinoem) March 10, 2023

House Bill 1193 is a 113-page proposed law that updates the Uniform Commercial Code (UCC). The UCC is a core commercial law that ensures uniformity in banking and money practices in the U.S.

The proposed amendment defines money as “a medium of exchange that is currently authorized or adopted by a domestic or foreign government.”

Crypto assets like Bitcoin wouldn’t be an accepted form of money under the new proposal. At the same time, the hotly debated implementation of a CBDC is supported.

Veto Draws Crypto Community Support

Governor Noem’s veto has drawn praise from crypto stakeholders who praised her foresight. Cardano founder Charles Hoskinson posted a meme showing his appreciation for the governor’s actions.

Meanwhile, the bill also drew opposition from conservative advocates. Rep Julie Auch said the information inside the bill allows the government to invade citizens’ financial privacy.

“This information inside of this bill, sets the means, and allows the state of South Dakota, the federal government, or the people in charge of our money to track your money. If they don’t want you to have access to your money five miles from your home, they can shut your money off.”

However, the South Dakota Bankers Association said the failure to adopt the updated UCC “jeopardizes South Dakota’s ability to remain competitive in commerce and fair market trade.”