A law that would have reportedly categorized a prospective digital currency issued by a central bank as money but would have excluded cryptocurrencies from this classification was vetoed by the Republican governor of South Dakota, Kristi Noem.
Over the course of the past few years, decision-makers at the Federal Reserve have debated whether or not to introduce a digital version of the dollar.
In a letter of veto that was sent to the South Dakota House of Representatives, Noem stated that the legislation opens the door to the risk that the federal government could more easily adopt a digital currency itself.
Noem made these statements in reference to the possibility that the federal government could more easily adopt a CBDC.
The measure would have defined money as a medium of exchange that is currently approved or adopted by a domestic or foreign government.
This definition would have been applicable to both domestic and international governments. In the House of Representatives, lawmakers approved the proposal by a margin of 49-17, and in the Senate, they approved it by a margin of 24-9; both of these margins are ones that would enable for the veto to be overridden in their respective houses.
Noem went on to say that cryptocurrencies, which are decentralized digital assets that may be moved from one digital wallet to another, would not be regarded as money under the new rules.
She said that because the measure discouraged development within the fledgling industry, it restricted citizens’ freedoms and put them at a business disadvantage.
Many who are opposed to the idea of a central bank issuing digital currency argue that such an endeavor would make individuals more susceptible to censorship and monitoring by the government.
Digital assets administered by central banks are not decentralized like Bitcoin, Ethereum, and other cryptocurrencies like them.
Recently cryptocurrencies of various types have received renewed scrutiny due to a number of high profile scandals, such as the collapse of the crypto fund FTX.
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