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Crypto News

Texas Senator Leads Fight Against Central Bank Digital Currencies With Anti-CBDC Bill

Author

Jay Solano

Tags

Reading time

3 mins
Last update

Author

Jay Solano

Tags

Reading time

3 mins
Last update

Author

Jay Solano

Tags

Reading time

3 mins
Last update

anti-cbdb bill

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Ted Cruz, the Governor of Texas, has joined a growing number of lawmakers who favor anti-CBDC legislation, submitting legislation to the Senate that would prevent the Federal Reserve from issuing CBDCs directly to consumers.

Several state lawmakers in the United States have been at the focus of these actions in recent weeks. The move may have begun with the introduction of Congressman Tom Emmer’s “CBDC Anti-Surveillance State Act,” a bill that would restrict the Federal Reserve from directly issuing CBDCs to anyone.

Governor Noem explained that the bill adopts a definition of “money” that explicitly excludes cryptocurrencies. However, the revisions do classify Central Bank Digital Currencies as money. The Governor expressed several concerns regarding these developments.

Following this, Florida Governor Ron Desantis conducted a news conference where he stood behind a podium called “Big Brother’s Digital Dollar” and declared Florida to be a CBDC-free state.

According to Yaël Ossowski’s recent article for the Bitcoin Policy Institute titled “In Attempt to Stop CBDCs, States Are Rejecting Ostensibly Pro-Bitcoin Legislation,” it described how House Bill 1193, which Governor Noem blocked, could have actually been beneficial for bitcoin, rather than a net negative. 

Ossowski opined that the response to House Bill 1193 needed to fully consider the implications of the changes to the Uniform Commercial Code and cautioned politicians to be mindful of blocking bills that may have potential benefits for bitcoin.

The bill, which is based on an update to the Uniform Commercial Code, not only broadens definitions and safeguards for Bitcoin but also establishes a legal framework for acknowledging self-custody and integrating the protocol into traditional lending, insurance, and commercial transactions. 

In his article, the author notes that using opposition to CBDCs as a litmus test for conservative politicians is a noteworthy development and highlights the positive impact that Bitcoin can have on individual and economic freedom. However, he questions why this conflict is being fought through state commercial codes that do not directly relate to CBDCs.

Yaël Ossowski stated that conservatives view this bill as a way for a CBDC to gain entry through the backdoor and for eventual federal control of economic freedom. Since the bill specifies a precise definition of money that does not include Bitcoin, it is assumed that the government will classify CBDCs as money. 

However, according to Ossowski, this assumption is not necessarily true, and excluding Bitcoin from that definition is actually a positive. Ossowski noted that by not being classified as money, Bitcoin transactions are not recognized as money transmission, which would otherwise require licenses, permissions, and legal registrations.

In general, this approach keeps the Bitcoin protocol beyond the regulatory scope of restrictive regulations that apply to legal tenders, such as the US dollar.

Ossowski also mentions the “Catawba Digital Economic Zone, a self-proclaimed Web3 special economic zone enabled by Catawba Indian  Nation of the Carolinas.” It was the first quasi-jurisdiction to implement Article 12 of the Uniform Commercial Code in August of 2022.

However, according to Ossowski, Governor Noem’s veto of the bill can be understood. He stated that while her understanding of the bill was lacking, her instincts were correct. Ossowski also noted that the same could be said for Governor DeSantis’ efforts to prevent CBDCs from entering Florida.

He advises state legislators who understand Article 12’s advantages for Bitcoin and want to publicly voice their opposition to CBDCs by including that language in their version of the bill.

He wrote that given the current political situation, it is understandable that governors and legislators are motivated to take a stand against CBDCs. However, he also stressed that technical updates to commercial legal codes that would benefit Bitcoin are important and necessary. 

Ideally, states would adopt a more robust policy model that would promote the use of decentralized digital cash through Bitcoin while simultaneously keeping CBDCs at bay. Nevertheless, he emphasized that more work needs to be done in this regard.