Ted Cruz has joined a myriad of politicians in demonstrating their contempt for CBDCs in America — but what about pro-Bitcoin legislation?
Texas Governor Ted Cruz has joined a growing group of politicians who have come out in support of anti-CBDC bills, reintroducing legislation to the Senate that would prohibit a direct to consumer Federal Reserve-issued CBDC.
Recent weeks have seen several U.S. state politicians at the center of these actions. The trend was seemingly kicked off by the introduction of Congressman Tom Emmer’s “CBDC Anti-Surveillance State Act,” a bill that would prohibit the Federal Reserve from issuing a CBDC directly to anyone.
This was followed by South Dakota Governor Kristi Noem’s decision to veto House Bill 1193, which would have amended the provisions of the Uniform Commercial Code in the state. “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,” Governor Noem explained.
Subsequent to this, Florida Governor Ron Desantis held a press conference in which he stood at a podium labeled “Big Brother’s Digital Dollar,” proclaiming that Florida shall be a CBDC-free state.
But, in a recent article written for the Bitcoin Policy Institute titled “In Attempt to Stop CBDCs, States Are Rejecting Ostensibly Pro-Bitcoin Legislation,” Yaël Ossowski described how the House Bill 1193 blocked by Gov. Noem would actually have been a benefit for bitcoin, not a net negative. In his opinion, the response to House Bill 1193 did not consider the full respects of the changes to the Uniform Commercial Code, and he cautions politicians that they should be careful to not block bills that could potentially benefit bitcoin.
“The bill in question — based on an update to the Uniform Commercial Code — not only expands definitions and protections for Bitcoin, but actually creates a legal mechanism for recognizing self-custody and for the protocol’s inclusion in traditional lending, insurance, and commercial transactions,” he writes. “To have CBDC-bashing as the latest litmus test for conservative politicians is indeed revolutionary, and from the point of view of individual and economic freedom that Bitcoin provides, is a positive phenomenon. But why is the battle being played out in rudimentary state commercial codes that have nothing to do with Central Bank Digital Currencies?”
Ossowski described how, for conservatives, this bill represents “a backdoor for a CBDC and for eventual federal government control of economic freedom.” Because it gives a precise definition of money that excludes Bitcoin, it is assumed that a CBDC is what the government will qualify as money. This, however, is not necessarily a given, and the leaving out of bitcoin within that definition is actually a positive, according to Ossowski. “Not being defined as money means that Bitcoin transactions are not recognized as money transmission, which would otherwise require various licenses, permissions, and legal registrations,” he wrote.
“Overall, that keeps the Bitcoin protocol outside the regulatory scope of restrictive rules that apply to legal tender like the US dollar.”
Ossowski also cites the “Catawba Digital Economic Zone, a self-dubbed Web3 special economic zone enabled by laws of the Catawba Indian Nation of the Carolinas.” In August of 2022 it became the first quasi-jurisdiction to adopt Article 12 of the Uniform Commercial Code.
They estimate that this bill gives them better legal footing for bitcoin, not worse.
“Unlike previous attempts to integrate digital assets under existing law, the amendments define them directly within the UCC. This provides greater certainty, simplicity, and uniformity. The Amendments as approved on July 15th also address all the major concerns with other associated attempts, including the issues of security control, perfection, priority, and custodianship. The Amendments are forward looking, and technology neutral.”— “Catawba Digital Economic Zone Approves Uniform Law Commission’s Digital Asset Amendments to the Uniform Commercial Code”
Ossowski does conclude, though, that it is understandable why Gov. Noem vetoed the bill. “While her understanding of the bill was flawed, her instincts were correct,” he said. “The same applies to DeSantis’ mission to snipe CBDCs before they ever reach Florida’s shores.”
He recommends that state lawmakers who grasp Article 12’s benefits for Bitcoin, and who desire to politically pronounce their opposition to CBDCs, should simply write that statement within their version of the bill.
“Pushed to this political juncture, we can’t fault governors and legislators for wanting to plant an anti-CBDC flag,” he wrote. “We should remind them, however, that technical updates to commercial legal codes that would benefit Bitcoin are desirable and necessary.
Ideally, states would adopt a more sound model policy that would help advance the cause of decentralized digital cash in the form of Bitcoin while forever keeping CBDCs off the table. But our work has only begun.”
Leave a Reply