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FILE South Dakota Gov. Christy Noem participates in a panel discussion during the Republican Governors Association convention on November 15, 2022 in Orlando, Fla. The recent veto of a bill that would have created regulations for cryptocurrency use in the state. (AP Photo/Phelan M. Ebenhack, File)

The South Dakota House failed on Monday to override Gov. Christy Noems recent veto of a bill that would have created government regulations for cryptocurrency use in the state.

The bill passed smoothly in the entire legislature, and Noems veto the previous week was upheld on a 3730 vote.

Supporters had argued that the bill would centralize the various cryptocurrency systems through a government oversight commission, thereby increasing transparency. But opponents see the proposed rules as a tool for potential government surveillance and encroachment and say they want more time to see how such laws work in other states.

Six more states have passed an update to the Uniform Commercial Code that requires cryptocurrency exchanges to have solid records in order to be considered money. The national commercial standards aim to regulate digital currency exchanges by mandating transaction records, but Noem said such a move would take away the South Dakotans freedom of the market.

It would be unwise to create rules governing something that does not yet exist. More importantly, South Dakota should not open the door to a possible future by the federal government, Noem said in vetoing the bill. I said in a statement last week.

As similar bills emerge in other state legislatures, Republican counterparts such as Gov. Ron DeSantis of Florida and U.S. Rep. Tom Emmer of Minnesota has expressed concern about potential government surveillance, similar to Chinas heavy-handed surveillance of its markets. Doubts over the regulation of central bank digital currencies come a year after President Joe Bidens executive order to crack down on federal bank-owned digital currencies. Bidens move triggered a flurry of misinformation, including claims that it would lead to a cashless society.

Proponents of the bill argued that those who believe the government would replace cryptocurrency companies with a federal system are wrong, and that the bill would only bridge the federal government and digital currencies, which are not currently recognized as money. Has been.

The bills sponsor, House Republican Hugh Bartels, said he expected most countries to pass such code updates amid the rise of various forms of cryptocurrency.

The misconception is that this bill is authorizing a central bank digital currency, Bartels said. Its just setting up a way to do business with it.

The first most popular cryptocurrency, bitcoin, was launched more than a decade ago. Despite being fundamentally digital currency, cryptocurrencies are not backed by any government entity.

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This story has been corrected to show the House vote was 37-30, not 36-30.

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South Dakota Gov. Veto of Cryptocurrency Regulations Upheld - CryptoSaurus