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 ban a direct-to-consumer CBDC issued by the Federal Reserve.
Recent weeks have seen several US state politicians at the center of these actions. The trend apparently began with the introduction of Congressman Tom Emmer’s “State Anti-CBDC Surveillance 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 provisions of the Uniform Commercial Code in the state. “The bill adopts a definition of ‘money’ to specifically exclude cryptocurrencies. But these reviews do include the Central Bank Digital Currencies as money. These developments concern me for a number of reasons,” said Governor Noem explained.
After this, the governor of Florida, Ron Desantis held a press conference in which he stood at a podium labeled “Big Brother Digital Dollar,” proclaiming Florida to be a CBDC-free state.
But, in a recent article written for the Bitcoin Policy Institute titled “In an attempt to stop CBDCs, states are rejecting ostensibly pro-Bitcoin legislation”, Yaël Ossowski described how Bill 1193 blocked by Governor Noem would have actually been a benefit for bitcoin, not a net negative. In his opinion, the response to House Bill 1193 did not consider all aspects of the changes to the Uniform Commercial Code, and he cautions politicians to be careful not to block bills that could benefit bitcoin.
“The bill in question, based on an update to the Uniform Commercial Code, not only expands the definitions and protections for Bitcoin, but actually creates a legal mechanism for recognizing self-custody and for the inclusion of the protocol in lending, insurance, and traditional business transactions. ,” he writes. “Having attacks on CBDCs as the ultimate litmus test for conservative politicians is truly revolutionary and, from the point of view of the individual and economic freedom that Bitcoin offers, a positive phenomenon. But why? that the battle is going on in rudimentary state commercial codes that have nothing to do with the digital currencies of the Central Bank?
Ossowski described how, for conservatives, this bill represents “a back door to a CBDC and to the eventual control of economic freedom by the federal government.” Because it gives a precise definition of money that excludes Bitcoin, a CBDC is supposed to be what the government will classify as money. This, however, is not necessarily a given, and the exclusion of bitcoin within that definition is actually a positive thing, according to Ossowski. “Not being defined as money means that Bitcoin transactions are not recognized as transmitting money, which would otherwise require various licenses, permits, and legal registrations,” he wrote.
“Overall, that keeps the Bitcoin protocol out of the regulatory reach of the restrictive rules that apply to legal tender like the US dollar.”
Ossowski also cites the “Catawba Digital Economic Zone, a special economic zone calling itself Web3 enabled by the laws of the Catawba Indian Nation of the Carolinas.” In August 2022 it became the first quasi-jurisdiction to adopt Article 12 of the Uniform Commercial Code.
They reckon this bill gives them a 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 approved on July 15 also address all major concerns with other associated intents, including security control, perfection, priority, and custody issues. The amendments are forward looking and technologically neutral.”—“Catawba Digital Economic Zone Approves Digital Asset Amendments from the Uniform Law Commission to the Uniform Commercial Code”
However, Ossowski concludes that it is understandable why Governor Noem vetoed the bill. “While his understanding of the bill was flawed, his instincts were correct,” he said. “The same is true of DeSantis’ mission to attack CBDCs before they reach Florida shores.”
He recommends that state legislators who understand the benefits of Article 12 for Bitcoin, and who wish to make their opposition to CBDCs politically vocal, simply write that statement within their version of the bill.
“Pressed by this political juncture, we cannot blame governors and legislators for wanting to plant an anti-CBDC flag,” he wrote. “We should remind you, however, that technical updates to commercial legal codes that would benefit Bitcoin are desirable and necessary.
Ideally, states would adopt a stronger model policy that would help advance the cause of decentralized digital cash in the form of Bitcoin, keeping CBDCs off the table forever. But our work has only begun.”
