Senator Wendy Rogers’ new proposal to institute Bitcoin as legal tender may be problematic, as the US Constitution does not allow a state to create its own legal tender.
Arizona State Senator Wendy Rogers has issued a proposal, hoping to give Arizona the power to make Bitcoin legal tender in the state. Bill, nicknamed ‘SB 1341‘, could see citizens opting to receive their salaries in bitcoin, and businesses could use bitcoin as they see fit.
Although Rogers has been somewhat controversial, having taken office in early 2021, previously expressing praise for conspiracy theory group, QAnon – it’s not a far-fetched proposition to toss there, given what others are beginning to perform in the United States and abroad. .
Will the US Constitution prevail over Rogers’ new proposal?
The biggest hurdle that SB 1341 will undoubtedly face is the US Constitution, which currently does not allow a state to create its own legal tender.
For those “strict constructivists” who believe that the U.S. Constitution should be interpreted exactly as it is written, without the need to refer to anything else, that’s an easy “no” to Senator Rogers’ proposal – while “modernists” who consider it more of a “living document”, could argue why Arizona implementing its own lawful currency is still within the bounds of the Constitution.
For context, it should be noted that the bill, in its current format, only mentions “bitcoin” – not all cryptocurrencies. For SB 1341 to become law, it will have to pass the Arizona Senate and House of Representatives, before going to Arizona Governor Doug Ducey to be signed.
Unfortunately for Rogers, this will be nothing short of an uphill battle, given that the US Constitution currently offers no provision or amendment allowing individual states to institute their own legal course.
“Congress shall have power…to mint currency, to regulate the value thereof and that of foreign currency, and to fix the standard of weights and measures…”
The currency clause, art. 1, sect. 8, Cl. 5 | United States Constitution
Pursuant to the Currency Clause, the power to determine what is and what is not “lawful money” is an exclusive power of Congress. However, according to a New York lawyer, Senator Rogers’ bill may not have as much impact in Arizona as expected.
“The Currency Clause means that the power to determine what is and what is not ‘legal tender’ is the exclusive jurisdiction of Congress,” said Preston Byrne, a partner at the Anderson Kill law firm of Washington, D.C. . Byrne advises a wide range of technology companies, including cryptocurrency miners and stakers, decentralized protocol developers, hedge funds and other institutional investors.
Byrne believes that even if the bill becomes law in Arizona, it would not have a significant impact on bitcoin usage in the state.
El Salvador leads the way, but could Texas be next?
As it stands, El Salvador’s decision in September to officially make bitcoin the country’s legal tender alongside the US dollar makes the country the only one in the world to have made cryptocurrency its official currency.
However, despite this historic precedent, the country is under intense scrutiny from the International Monetary Fund (IMF), which is urging El Salvador to reconsider its decision in light of the significant risks presented to consumers:
“Adopting a cryptocurrency as legal tender, however, carries great risks to financial and market integrity, financial stability, and consumer protection. It can also create contingent liabilities.
The IMF began to denounce the adoption of cryptocurrencies as legal tender in August 2021. In countries with stable inflation, a strong currency and trustworthy institutions, there would be no incentive for families and companies to buy or charge with crypto given its volatility.
Another potentially promising proposition could come from Texas, where Republican real estate developer and current Texas gubernatorial candidate, Don Huffines, recently said he would make bitcoin “legal tender” if elected.
Last year, Rogers was named to Blockchain and Cryptocurrency Study Committee, where she says she will work to help make Arizona a crypto-friendly state. The committee aims to determine the mechanisms by which cryptocurrencies can be integrated into the state’s pre-existing financial infrastructure. It currently includes members from the Arizona State House and Senate and participants from the crypto industry.
What do you think of this subject? Write to us and tell us!
All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.