Proponents of commercial code updates back with new strategy, allies

Bills to adopt Uniform Commercial Code, regulate CBDC have backing of governor

Photo by Eduardo Soares on Unsplash

PIERRE — A year of being forced back to the drawing board has so far proven to be fruitful for proponents of updating the state’s provisions on the Uniform Commercial Code (UCC).

The House State Affairs Committee easily advanced House Bill 1163, which would update the state’s Uniform Commercial Codes, which are intended to better standardize commerce between states — both for business and individuals.

Like last year, the legislation had the backing of the state’s banking and business organizations.

“The UCC is the legal and commercial infrastructure that has underpinned transactions for years,” said Karl Adam, President of the South Dakota Bankers Association. “It has been successful in creating certainty and security for Americans involved in commercial activity of all sizes and locations.”

But unlike a year prior, updating the codes has the support of Gov. Kristi Noem’s office. Noem vetoed similar legislation in 2023, citing concerns about how it would pave the way for a central bank digital currency (CBDC) — a digital currency similar to bitcoin that is backed by a government,

That concern, says the Governor’s General Counsel Katie Hruska, is nullified by changes made to the updated bill brought this year, plus the addition of companion legislation that the committee also passed Friday morning — which would regulate the use of CBDC in South Dakota. That bill, House Bill 1161, would specifically prevent the state from accepting CBDC. It passed unanimously through the same committee moments before HB 1163.

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