HB1163 Allows Digital Currency & Government Intrusion

This bill introduces changes to the UCC code which opens the door to digital currency and more government meddling.

HB1163 modifies the South Dakota Uniform Commercial Code (UCC). The bill is VERY long (117 pages) and is complicated and time consuming to read. It repeatedly says it has nothing to do with digital currency

But the modification to Section 43. Chapter 57A-9-102 (a)(31A) of UCC says, “Electronic money means money in electronic form.”

Digital currency is by definition money in electronic form. This short, one sentence addition to the South Dakota Uniform Commercial Code (UCC) adds the wording necessary for digital currency.

So, yes, HB1163 changes the UCC to allow DIGITAL CURRENCY.

Why is digital currency a bad thing? When a currency is digital it is easy for the government to cut off access to money to punish people with specific views or religions.

Here are FEW other changes that are concerning (there are likely many more buried in the lengthy document):

1. A modification to Section 46. Chapter 57A-9 (2)(b)(1) says, “financial institutions will still consider an account holder the owner of “electronic money, a record attached to or logically associated with electronic money, or a system in which the electronic money is recorded, limits the use of the electronic money or has a protocol programmed to cause a change, including a transfer or loss of control.”

   Why are they discussing loss of control? Could the federal government keep someone from accessing their money? Could they take money randomly out of a person’s account without due process? Could the person’s money expire at a certain time, like airline miles? Could everyone with a certain political view be kept from accessing their accounts?

2. A modification to Section 26, Chapter 57A-4A-201 allows banks to collect, store and use biometric data on customers. There is no discussion of safeguards to protect this data or criteria on who can access the data, how the data can be used, or what happens when the data is hacked.

   Could this information be shared with the federal government? Could the federal government introduce legislation that would force banks to share this information? What happens if the information is hacked? Could the personal biometric data be sold?

3. And while most of Section 27, Chapter 57A-4A-202(c) is not new, the language does not appear to address hacking or online fraud, a significant issue in the electronic age.

   What happens if a customer’s account is hacked or compromised? Who is responsible, the customer or the bank?

   Again this bill includes language that allows digital currency and would open the door to government intrusion. Please call your legislator and ask him/her to VOTE NO on HB1163.