By Ben Zeisloft
Gov. Kristi Noem (R-SD) vetoed a bill that would have classified a potential central bank digital currency as money while excluding cryptocurrencies.
Policymakers at the Federal Reserve have considered the adoption of a digital dollar over the last several years. Noem said in a veto letter to the South Dakota House of Representatives that the legislation “opens the door to the risk that the federal government could more easily adopt a CBDC, which then may become the only viable digital currency.”
“At this moment in time, such a government-backed electronic currency has not yet been created,” Noem told lawmakers. “More importantly, South Dakota should not open the door to a potential future overreach by the federal government.”
The bill would have defined money as a “medium of exchange that is currently authorized or adopted by a domestic or foreign government.” Lawmakers passed the measure 49-17 in the House of Representatives and 24-9 in the Senate, both of which are margins that would allow for the overturn of the veto in the two chambers.
Noem added that cryptocurrencies, which are decentralized digital assets that can be transferred between virtual wallets, would not be considered money under the legislation. She asserted that the bill therefore “needlessly” limited freedoms and placed citizens at a “business disadvantage” by discouraging development within the nascent sector.