Gov. Kristi Noem says she vetoed updates to the Uniform Commercial Code in part to protect the cryptocurrency industry.
However, the head of a South Dakota blockchain group says they support the updates she rejected.
Noem says updates to the Uniform Commercial Code will invalidate established cryptocurrencies in the event the federal government creates its own digital currency—or what’s called a Central Bank Digital Currency.
Noem vetoed updates to the Uniform Commercial Code earlier this month. She says the law will disadvantage cryptocurrencies.
“So, a bitcoin, a cryptocurrency would be gone. It does not say that a future digital currency could be banned, but it eliminates all those that are in existence today," Noem said. "That is a wording and a definition in these UCC guidelines that is a bit alarming because it’s wiping out currencies that already exist if, in fact, the government decides to set one up.”
However, groups backing the bill are also opposed to a Central Bank Digital Currency. A currency like that would bypass the use of the banking system for holding onto money.
Opposition to a Central Bank Digital Currency includes a South Dakota cryptocurrency industry group which supports the vetoed updates to the Uniform Commercial Code.
“None of the parties that are behind this bill have any interest in a central bank digital currency. It’s never been the motive or incentive of any of the parties that have put this forward to promote a central bank digital currency," said Barry Sackett, the head of South Dakota Blockchain Industries. "It’s a bit of a red herring.”
Sackett said South Dakota has a good, well-regulated banking system and that the UCC updates would add to that by providing a framework for cryptocurrency.
Without the updates, Sackett worries South Dakota will fall behind other states that do adopt them.
House Bill 1193 passed the legislature with a slim, veto-proof majority. Lawmakers will vote whether to override the governor’s veto Monday morning.
