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Republican governor Kristi Noem of South Dakota has vetoed a bill that would have established a central bank digital currency (CBDC) as a legitimate form of money without recognizing assets like BTC and Ethereum.
Kristi Noem Shoves the Bill Aside
In a recent statement, Noem commented:
At this moment in time, such a government-backed electronic currency has not yet been created. More importantly, South Dakota should not open the door to a potential future overreach by the federal government.
The bill was known as House Bill 1193. It defined money as a “medium of exchange that is currently authorized or adopted by a domestic or foreign government.” Interestingly, the bill appeared to garner quite a bit of attention, respect, and support in both divisions of the South Dakota government. It was passed with votes of 49 to 17 in the House, while the Senate also approved it with a vote of 24 to nine.
However, despite getting support from both branches, the governor herself chose to push it away. Noem believed that the bill discouraged further development and investments in the digital finance sector.
There are a few ways to look at this. One is that Noem is ignorant and that she’s choosing to block any initial attempts to give crypto life in her state. However, this would be a bare-bones surface look, and the issue goes much deeper.
In many ways, it can be argued that Noem, by vetoing the bill, is giving crypto a much larger chance at life not just in South Dakota, but in the country. The idea of a central bank digital currency is a scary one because it brings into the picture something that crypto was never supposed to fall victim to: third-party and/or federal control.
The idea of digital currency was that users could have anonymity, autonomy, and independence through its use. They could utilize digital currencies to make purchases without having middlemen or the government spying on their activities. While everyone keeps talking about a central bank digital currency as though it’s a top-of-the-line invention, it goes against everything crypto initially stands for in that it would ensure its issuance occurred only through a centralized financial entity.
Giving BTC and Other Assets a Fair Playing Field
In addition, its existence would likely give way to the destruction of mainstream assets like bitcoin in that they would now serve as competition for the issuing banks. Bitcoin, Ethereum, and similar digital assets were first created for purchases. While they’ve taken on investment and even hedge forms in recent years, they were initially designed to push credit cards, checks, and fiat currencies to the side.
By vetoing the bill and giving these assets their fair shake, Noem is thus allowing the day in which assets like BTC can serve as legitimate, valid money.