Legislators Made a Mistake in Passing HB 1082
Amber Vibeto
District 3 Chair
NDCAN Executive Director
March 23, 2023
Although HB 1082 has been signed into law, I would like to address the mischaracterization of the concerns surrounding this bill. According to Ed Smith, Chair of the Uniform Commercial Code 2022 Amendments Enactment Committee, misinformation is being spread regarding North Dakota’s HB 1082 and similar bills around the country that are being sold as a simple UCC update. According to Mr. Smith, “There is a national effort to oppose these bills due to a misperception that the amendments will prevent the use of Bitcoin and other cryptocurrencies and encourage the development of a central bank digital currency in the United States. Both statements are 100% false.”
The argument is not that the use of Bitcoin and other cryptocurrencies will be prevented. Nor is the argument that the bill encourages the development of a central bank digital currency. The problem is that cryptocurrencies will be excluded from the definition of money while accepting as money a central bank digital currency that is actively being pursued by the Biden Administration.
According to Uniform Law Commission’s own documents: “The amendments respond to market concerns about the lack of definitive commercial law rules for transactions involving digital assets, especially relating to (a) negotiability for virtual (non-fiat) currencies, (b) certain electronic payment rights, (c) secured lending against virtual (non-fiat) currencies, and (d) security interests in electronic (fiat) money, such as central bank digital currencies.”This is reiterated in A Summary of the 2022 Amendments to the Uniform Commercial Code, and as Steven Weise explains in the webinar UCC Amendments Part 1: Digital Assets, “Bitcoin will not be money,” but “Central Bank Digital Currency, CBDC could be money.”
Mr. Smith urged the amendments to be understood through the context of the entire bill rather than take at face value what the language clearly states. However, the amendments should be viewed in the context of what is transpiring on a global and federal level. The recent collapse of three major banks will likely only strengthen the Biden Administration’s resolve to introduce a centralized currency.
Also related: Fed Now is a pilot program being launched in July 2023 that is being sold as an improvement on the domestic payment system, even though we already have instant payment availability. Fed Now is the infrastructure that needs to be in place in order for CBDC to work. It will be an optional program in the beginning, but the well-founded concern is that everyone will eventually be required to have a Fed Now account. It’ll be like a government run PayPal account which sounds convenient, but the transfer of money will be controlled on both ends by the federal government. If implemented, a centralized digital bank currency will lead to unprecedented government power over citizens’ money. Because CBDC’s are programmable and traceable, the federal government will have the power to decide when, where, and how individuals spend and save their money. Goodbye freedom as we know it. Hello social credit system.
There is clearly enough legitimate concern from the public to warrant a reconsideration on these amendments. Legislators should address President Biden’s plan to pursue a Central Bank Digital Currency and formulate a response to protect North Dakota from the federal government’s weaponization of the financial sector. Governor Ron DeSantis is choosing to play offense – not defense – against the federal government’s agenda to control every aspect of our lives by his legislative proposal to prohibit the use of a federally adopted CBDC as money within Florida’s Uniform Commercial Code. Why don’t we do the same? The state legislature does not exist to simply carry out the wishes of the federal government in exchange for money. It also does not have to be ruled by monetary policy from an unelected commission.
As the federal government grows more powerful and more tyrannical by the day, it will be up to state legislatures to protect our rights and freedoms provided under the Constitution. Governor Burgum and the ND state legislature failed to do this with the passage of HB 1082. Policy decision mistakes happen, particularly when inundated with too many bills in too short of a timeframe and particularly when lobbied by professional associations. Legislators still have the opportunity to listen to the concerns of individual citizens rather than corporate interests and pass legislation to expressly protect North Dakotans from a central bank digital currency before the session ends.
*Note: Representatives Hoverson and VanWinkle and Senator Paulson voted rightly against HB 1082.
