If nothing else, Governor Kristi Noem's veto of House Bill 1193, which would enact changes to South Dakota's business code, is likely to bring a lot more public attention to an issue many of us may find quite dense.
This refers to the realm of cryptocurrency, which is a digital currency used in some financial transactions. Indeed, according to South Dakota Public Broadcasting, HB 1193 boils down to what the definition of "money" is.
So what's up? Here is a rough explanation:
Noem vetoed the bill last Friday, claiming that its definition of money does not cover cryptocurrencies. โBy expressly excluding cryptocurrencies as money, it would be more difficult to use cryptocurrencies,โ his veto letter read. "By unnecessarily limiting this freedom, HB 1193 would put the citizens of South Dakota at a business disadvantage."
He said it also allows for the creation of federal "central bank digital currencies," or CBDCs, that could be treated and exchanged like money. The letter said that this "opens the door to the risk that the federal government may more easily adopt a CBDC, which may then become the only viable digital currency." However, this has yet to happen, leading Noem to point out: "It would be unwise to create regulations governing something that doesn't exist yet." (Some may find this ironic, possibly, since the governor has also pushed to ban critical race theory from school curricula even though it's not taught here.)
Noem's veto sets up an interesting matchup. HB 1193 is supported by agencies such as the South Dakota Bankers Association (SDBA), the South Dakota Independent Community Bankers, the South Dakota Retail Association, the South Dakota Chamber of Commerce and Industry, the Sioux Falls Chamber and the South Dakota Association Trust. It also passed both the House and Senate by veto-proof majorities, although a later letter opposing the bill that was sent to Noem had enough signatures to suggest that the votes to override the veto are no longer there. .
SDBA's Karl Adam stated that Noem's concerns were not justified. KELO reported that according to Adam, โvirtual currencies are not defined as money because they are not physical items and cannot be held for borrowing purposes. But, (Adam) said, they are defined elsewhere in the legislation as a controllable electronic record, or CER."
The primary sponsor of the bill is Rep. Mike Stevens of Yankton. He addressed the issue when it came up a week ago on a District 18 cookie barrel, in which the bill's opponent, Rep. Julie Auch of Lesterville, opened the forum with a lengthy statement condemning HB 1193, claiming the measure it could be used by the federal government to control and track spending and personal liberty, according to a Press & Dakotan article.
In response, Stevens noted that the trading code has been updated multiple times in its 50+ years of existence and needs to be adjusted for recent developments, including the rise of digital currency.
โA lot has changed in that sense of how we do banking,โ he said. โI have spoken to every one of our bankers in Yankton, and all the big banks and small independent banks agree that the bill should pass. They are in favor of it."
Which brings us to Veto Day at Pierre, set for March 27. The topic in general may seem convoluted, but we also know that digital currencies are a modern fact of financial life to varying degrees. It would seem practical to keep regulations up to date with these realities, and given the agencies backing the bill, HB 1193 would seem to have some merit.
But that's something for lawmakers to determine, and the rest of us can watch and learn more as Ban Day approaches.
