The Missouri Senate introduced SB 194 on December 1, which proposed banning central bank digital currencies (CBDCs) as legal tender within the state. The bill seeks to prohibit public entities from accepting or using CBDCs and amends the definition of “money” under the Uniform Commercial Code to exclude these digital currencies.
SB 194, sponsored by Senator Brattin, outlines several provisions that impact Missouri’s financial policy, including the requirement for the state treasury to maintain gold and silver reserves equal to at least 1% of all state funds. Furthermore, it also reduces the tax liability for gold and silver
“exempts from state income tax that portion of the capital gain on the sale or exchange of gold and silver that is otherwise included in the taxpayer’s federal adjusted gross income.”
In addition to addressing precious metals, the bill explicitly prohibits public entities from participating in any testing or pilot programs related to CBDCs conducted by the Federal Reserve or other federal agencies. This position reflects growing concerns among some state lawmakers about the implications of CBDCs for financial privacy, monetary policy, and state sovereignty.
The change to the definition of “money” in the Uniform Commercial Code to exclude CBDCs is a notable legal shift. This change could have significant impacts on commercial transactions, contracts, and financial instruments within Missouri, effectively limiting the legal recognition and enforceability of CBDC-based transactions.
Earlier in 2024, the Missouri Legislature considered related measures regarding digital currencies. House Bill 2780, introduced in February, sought to prevent public entities from accepting or using CBDCs and passed the House in April with substantial support. The Senate has also reviewed companion legislation, such as SB 1352, indicating a continued legislative focus on regulating digital currencies at the state level.
Missouri’s legislative actions come amid broader national and global discussions about the adoption and regulation of CBDCs. While some view CBDCs as an evolution in digital payment systems with the potential to improve efficiency and financial inclusion, others express concerns about centralized control, privacy issues and the impact on traditional banking systems.
The introduction of SB 194 positions Missouri among states that are actively exploring the role of government-issued digital currencies in their economies.