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Commerce Committee backs bill barring use of federally recognized central bank digital currency in Arizona contracts
Summary
The Arizona House Commerce Committee voted 6-4 to give Senate Bill 1095 a due-pass recommendation. The bill would prohibit federally recognized central bank digital currencies (CBDCs) from being used as legal tender or as the subject or medium of payment for contracts, securities or certain escrow settlements within the state.
The Arizona House Commerce Committee voted 6-4 to return Senate Bill 1095 with a due-pass recommendation after a discussion about privacy and state authority over new forms of money.
Committee staff told members that “a central bank digital currency or CBDC is a digital liability of a central bank that is widely available to the public.” The bill, as explained to the committee, would prohibit a federally recognized CBDC from being used as legal tender or as the subject or medium of payment of any contract or security and would bar escrow transfers from being settled or backed by a federally recognized CBDC.
Chairman Wenninger said he opposed CBDCs on privacy grounds. “I don’t like them,” he said, adding that a government-issued digital currency would be “very trackable” and could be “turned on and off” by the issuer. A committee staffer expanded on that concern, saying a CBDC could allow tracking of where and for what purpose money is spent.
Representative Aguilar said he would vote against the measure because he believes the technology and federal developments are still premature for state-level action. “I’m gonna be voting no today… we don’t know where we’re at with this type of technology,” Aguilar said.
Other members questioned the reach and limits of state authority if the federal government were to establish a CBDC. One member framed the measure as an exercise of states’ rights under the Tenth Amendment, while staff told members the bill is intended to prevent a federally recognized CBDC from being used within Arizona.
The committee recorded a roll-call vote with six ayes and four nays. The members recorded as voting yes were Representative Blackmon, Representative Diaz, Representative Hendricks, Representative Wilmeth, Vice Chairman Wei and Chairman Wenninger. Representatives Aguilar, Cavera, Connolly and Villegas were recorded as voting no.
The sponsor of the bill was not present at the hearing and committee staff said they were available to answer technical questions. The committee gave the bill a due-pass recommendation.
