SB 1281 Summary

• Creates Arizona Revised Statutes Chapter 9 to define "legal tender" as any medium of exchange authorized by the U.S. Constitution or Congress, explicitly excluding federally recognized central bank digital currency (CBDC).

• Prohibits CBDC from being used as legal tender or as the subject or medium of payment for any contract, security, or similar instrument in Arizona, regardless of commercial transaction law.

• Amends escrow disbursement rules (§6-843) to prohibit settling or backing transfers with CBDC, including for distributed ledger technology transfers within secure networks of federally insured depository institutions.

• Updates multiple sections of tax code (§§43-1021, 43-1022, 43-1121, 43-1122) and other statutes to reference the new definition of "legal tender" in §1-901 rather than repeating the definition.

• Modifies the Uniform Commercial Code (§47-1201) to exclude CBDC from the definition of "money" for purposes of commercial transactions.