Smart Republicans acknowledge that Kristi Noem is incompetent. Senate President Pro Tempore Lee Schoenbeck has confirmed my assessment that Noem has hired incompetent staff. Now longtime republican insider and South Dakota Bankers Association President Karl Adam confirms my analysis that Governor Noem's veto House Bill 1193 It's a complete misfire.
under the pressure of club for growth and other right-wing radicals Looking for a bogeyman, Noem vetoed HB 1193, a comprehensive update to the Uniform Commercial Code, on the pretext that it harmed cryptocurrency and opened the door for Uncle Sam to create an official government digital currency ("CBDC"). from the central bank). At SDPB last Thursday, banker and Appointed by Noem Adam explained that Noem misread HB 1193. First, it would actually put cryptocurrency on a firmer legal footing:
…for all the bills that the South Dakota Bankers Association worked on and followed through this legislative session, this would have been the last one that we thought would have raised concerns not just with our legislature, across the state, and certainly with our governor.
…she misinterpreted the language to specifically exclude cryptocurrency in the UCC and not define it as money. There is a reason for that. Money is something tangible or an item that you can own. Not included in the definition of money for UCC state law purposes only. It does not change the definition as it relates to the Internal Revenue Service and other things, but only for the purposes of the Uniform Commercial Code. The crypto world or virtual currency is defined as a controllable electronic record. The reason for this is that virtual currency cannot be owned. You can't grab it.
Let me give you a couple of examples. If I go to a bank and apply for money, I apply to buy a car, a bank can loan me funds to buy the car and they insert their lien into a Title, a car is titled. They declare their lien on the title and that is how they secure their security interest in that car. The same would be true if you go to your lender for money to buy a house. They insert your security interest or your mortgage into a physical mortgage based on the physical location of that home. What this does to a controllable electronic record, since it cannot be owned, again, is defined as a controllable electronic record, or a CER. What this allows for those who are looking for the opportunity to use their crypto or Bitcoin as security, that unique set of blockchain numbers that identifies that I have X amount of dollars or as many virtual currencies, I can promise that as security.
If the bank is willing to do it, then they will have the opportunity to have control of that asset to lend me money and perfect their security interest, since I can use it as collateral to buy something. [Karl Adam, interview with Lori Walsh, South Dakota Public Broadcasting: In the Moment, 2023.03.16].
Adam explained that HB 1193 has no effect on the United States Federal Government's ability or intent to develop a Central Bank Digital Currency:
UCC is state law. It has nothing to do with the federal government and the reason we can do it under state law is because UCCS has been around for decades and in South Dakota since the early 1960s and we've done it well enough well as uniform state law is the road map should a dispute arise across state lines and interstate commerce. It has been defined because in the world there are two as we know it, and it is fair to say that the United States government, the United States Department of Treasury have talked about a CBDC, and there is an ongoing working group on CBDC , the good, the bad, and the ugly, and they're working to investigate that as we speak.
It does not mean that the Uniform Commercial Code, Amendments House Bill 1193 of 2022 advances in that sense. It doesn't. If that was an issue, it will be an issue with the federal government and we'll address that in a later discussion, but this doesn't move the ball forward. It's a defined term so that we can modernize the code to bring digital assets into the modern world as we continue to transact business not only in South Dakota but beyond state lines. [Adam, 2023.03.16].
Adam says that vetoing HB 1193 only disadvantages South Dakotans by restricting our ability to do business with people who use CBDCs:
If we don't seek to modernize this new legislation, the 2022 amendments, we will be putting our South Dakotans at a disadvantage. What the CBDC does, and your concern here is why it needs to be defined, there are two countries as we know them today that have a CBDC, the central bank digital currency. They are the Marshall Islands. The Marshall Islands have a CBDC called SOV, SOV and The Bahamas have the sand dollar. Since those two countries have a CBDC and we are in a global market, if they do business here, that should be identified in the terms [Adam, 2023.03.16].
Noem's staunchest defenders can only escape Adam's critique of Noem's misunderstanding of HB 1193 by suggesting that Karl is simply fucking Noem for the sake of it. kicking his wife Joan out of the Department of Health last Christmas. But no personal issue changes Adam's sober, banker, Republican critique of Noem's veto of HB 1193. When it comes to HB 1193, the Central Bank's cryptocurrency and digital currency, Noem doesn't know what he's talking about. She took her word for a couple of press releases from radicals who botched a line in a 105 section bill in a lizard people conspiracy theory about the well-informed explanations of South Dakota businessmen in their own party only to throw a little more red meat at their fans while throwing good business sense out the window.
