South Dakota’s Move to Restructure Currency Composition and the Definition of Cryptocurrency

03/02/2023 10:06 • Daily Digest • 71 views

On March 2, South Dakota, the United States, is taking action to try to redefine the composition of currency, and involves the classification of cryptocurrency. A bill in the state entitled “Amendment to the Uniform Commercial Code” indicates that digital currencies such as Bitcoin will be excluded from the definition of currency because they come from individuals or organizations. According to the proposed amendment, a possible medium of exchange will only be recognized as currency if it is “authorized or adopted” by the government.

South Dakota proposed a bill to change the definition of currency and exclude digital currency

Interpretation of the news:

The state of South Dakota, in the United States, is taking steps to redefine the composition of currency, and this involves the classification of cryptocurrency. On March 2nd, the state proposed a bill titled “Amendment to the Uniform Commercial Code,” which aims to exclude digital currencies such as Bitcoin from being considered official currencies. This is because digital currencies are not authorized or adopted by the government, and they come from individuals or organizations. Therefore, the proposed amendment implies that a possible medium of exchange can only be recognized as currency if the government authorizes or adopts it.

This move is a significant step towards regulating the cryptocurrency market and controlling its use to prevent fraudulent activities or money laundering. South Dakota’s redefinition of the composition of currency shows that the government is becoming more aware of the potential dangers that digital currencies pose to the national and global economy. It also indicates a shift towards encouraging the use of central bank digital currencies (CBDCs) as the primary form of digital currency.

While South Dakota is not the first state to attempt such amendments to the uniform commercial code, its move will likely influence other states and governments to follow suit. Regulating the use of cryptocurrencies is still a challenge globally, and this move shows that South Dakota is willing to be at the forefront of this new era of digital currencies.

The exclusion of cryptocurrency from the definition of currency could also mean that digital currencies will be taxed differently. Under the proposed amendment, cryptocurrencies will no longer be taxed as currency and will instead be taxed like assets. This could lead to more transparency and accountability in the use of digital currencies, as the government will have a better understanding of its use, ownership, and transactions.

In conclusion, South Dakota’s move to redefine the composition of currency and classify cryptocurrency is a significant step towards regulating digital currencies in the United States. By excluding digital currencies from the definition of currency, the government is creating a clear distinction between official currencies and digital currencies. This move could lead to more transparency and accountability in the cryptocurrency market and could influence other governments to adopt similar measures.

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