US States Challenge CBDC as Legal Tender

Four states—Utah, South Carolina, South Dakota, and Tennessee—have filed bills challenging CBDC’s status as legal tender. These states have proposed legislation to exclude CBDCs from their respective definitions of money, signaling growing resistance to the federal government’s push toward digital currencies.

Utah’s position on CBDC

In Utah, Representative Tyler Clancy introduced House Bill 164 on January 4, 2024, specifically excluding CBDC from the state’s definition of money. The bill defines CBDC as a digital form of money issued by government bodies such as the US Federal Reserve, foreign governments, central banks or reserve systems. The proposed Utah bill specifies that CBDC is “not legal tender and not legal tender in the state,” aligning with Utah’s Specie Legal Tender Act and the state’s Uniform Commercial Code (UCC)​​​​ ​.

South Carolina Legislative Actions

South Carolina’s approach mirrors Tennessee’s. State Senator Shane Martin introduced Senate Bill 861 on November 30, 2023. Like Tennessee, South Carolina’s UCC defines money as an authorized medium of exchange. Proposed Bill S861 would add the term “does not include central bank digital currency” to that definition.

South Dakota’s participation

In South Dakota, the Department of Labor and Regulation asked the chairman of the Senate Commerce and Energy Committee to bring Senate Bill 58 to the floor on January 9. That law also states that money “does not include central bank digital currency” in its definition under the state’s UCC.

The Tennessee approach

In Tennessee, State Senator Frank Nicely introduced a bill in the Tennessee Senate on January 12th proposing to amend the Tennessee UCC to exclude CBDC from the definition of money. The bill adds the clause “does not include any central bank digital currency” to the existing legal definition of money, which currently defines it as an authorized medium of exchange.

Federal vs. State Jurisdiction

These state-level initiatives raise questions about the supremacy of federal law over state law, particularly in matters related to monetary policy. Historical issues such as marijuana legalization show that state-level opposition can significantly influence federal policies. Opponents of state bills argue that under the Supremacy Clause, any federal law would take precedence over state law. However, the effectiveness of these state measures against potential federal CBDC implementation remains uncertain.

Globally, various governments are exploring the adoption of CBDCs. These digital currencies, backed and controlled by governments, are seen as a safer alternative to physical cash. However, concerns about government surveillance and control of consumer spending are prevalent. The digital nature of CBDCs could enable governments to monitor and potentially restrict individual financial transactions, raising privacy and civil liberties issues.


Actions by Utah, South Carolina, South Dakota, and Tennessee signal growing skepticism toward CBDCs at the state level in the United States. These developments reflect broader concerns about privacy, government surveillance, and the balance of power between federal and state jurisdictions. As the conversation around CBDC evolves, these state-level initiatives could play a key role in shaping the future of digital currency in the US

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