Florida lawmakers file legislation to reject central bank digital currencies

Florida could become one of the first states to reject via legislation plans by the Federal Reserve to implement a central bank digital currency.

House Bill 7049 and related bill Senate Bill 7054 both define the terms of central bank digital currency and money for the purpose of the U.S Uniform Commercial Code, which is a uniformly adopted state law for the transaction of interstate commerce. Both bills would prohibit the use of both federal and foreign-owned CBDC as money while still allowing virtual currencies like Bitcoin.

The push via the House and Senate bills to reject a central bank digital currency is a key plank in Republican Gov. Ron DeSantis' legislative priorities this session.

While much of the financial transactions in the U.S. and globally are digital, a CBDC would be digital only and not available in a tangible form.

In the bills, a central bank digital currency is defined as a digital currency, a digital medium of exchange, or a digital monetary unit of account issued by the United States Federal Reserve System, a federal agency, a foreign government, a foreign central bank or a foreign reserve system that is made directly available to a consumer and processed or validated directly by such entities.

Money is defined as a medium of exchange that is currently authorized or adopted by a domestic or foreign government and is further defined as a monetary unit of account which is established by an intergovernmental organization or by agreement between two or more countries, but explicitly excludes the use of a CBDC.

According to the SB 7054 analysis, 11 countries have now fully implemented a CBDC and 18 others are currently operating pilot programs for CBDC, including China, Russia, Iran and Australia. The U.S CBDC is currently in the developmental phase.

Brian Popelka, CEO of Bitt, a digital currency development company, told The Center Square that concerns over privacy and control of assets are not unfounded.

“The fervor over digital currencies lies in a reasonable concern over the control of assets. At Bitt, we believe privacy and sovereignty of personal assets should be carefully considered when designing a digital currency. Compliance and other standards should be firmly established before we judge prematurely via legislation.” Popelka said.

The UCC has had amendments drafted by the Uniform Law Commission and the American Law Institute to provide updated rules for commercial transactions involving virtual currencies and have made amendments to the definition of money.

In the U.S UCC model amendments, a digital currency that is recorded and transferable before it was authorized by the federal government has been excluded for use as money. Bitcoin, for example, was transferrable before it was recognized as a currency by the federal government.

These amendments will only allow the use of a federally controlled CBDC if one is ever fully implemented.

DeSantis said on March 23 that legislation is needed to prevent the financial sector from being weaponized for political agendas and further stated that President Joe Biden’s push towards a digital currency was to use it as a tool to surveil and control Americans.

Excluding the use of a CBDC has been part of a larger push to expel environmental, social and corporate governance agendas from the Sunshine State and to separate from President Joe Biden’s progressive policies, according to DeSantis.

In late March, the Florida House passed a bill that bans ESG policies and removing ESG considerations in state and local pension funds, bonding decisions, lending decisions and state contracting.

Federal legislation that would restrict the imposition of a CBDC is already in the U.S. House.