The Missouri Senate recently introduced SB 194, a bill that aims to ban central bank digital currencies (CBDCs) as legal tender within the state. Sponsored by Senator Brattin, the bill includes provisions that would prohibit public entities from accepting or using CBDCs. It also modifies the definition of “money” under the Uniform Commercial Code to specifically exclude these digital currencies.
One of the key provisions in SB 194 is the requirement for the State Treasurer to hold gold and silver reserves equal to at least 1% of all state funds. Additionally, the bill aims to reduce tax liability for gold and silver by exempting the portion of capital gains on the sale or exchange of these precious metals from state income tax.
Furthermore, SB 194 explicitly prohibits public entities from participating in any tests or pilot programs related to CBDCs conducted by the Federal Reserve or other federal agencies. This reflects the concerns of some state legislators regarding the potential implications of CBDCs on financial privacy, monetary policy, and state sovereignty.
The modification of the definition of “money” under the Uniform Commercial Code to exclude CBDCs could have significant implications for commercial transactions, contracts, and financial instruments within Missouri. This change may limit the legal recognition and enforceability of CBDC-based transactions in the state.
Missouri’s legislative actions concerning digital currencies come amidst a broader national and global discussion on the adoption and regulation of CBDCs. While some see CBDCs as a step towards more efficient digital payment systems that can enhance financial inclusion, others have raised concerns about centralized control, privacy issues, and potential impacts on traditional banking systems.
With the introduction of SB 194, Missouri joins other states in actively examining the role of government-issued digital currencies in their economies. This legislative move underscores the state’s commitment to regulating digital currencies and ensuring the stability and security of its financial system.