Texas wants to join Wyoming and completely regulate the status of bitcoin and other cryptocurrencies. Digital currency is to be considered a means of payment on a par with traditional money. Thanks to such provisions, Texas wants to attract new investors who will be tempted by the predictability of the law.
Already at the end of March, Greg Abbot, governor of the state of the Gulf of Mexico, supported the technology on Twitter blockchain "Chirping" that he can be counted among the supporters of the introduction of regulation into the state law cryptocurrency. It was a response to the actions of Tan Parker, a representative of one of the Texas districts, who presented changes to the Commercial Code. Parker wants Texas to align its law with innovative blockchain technology and regulate digital assets.
For some time in Texas, we have seen a wide movement to accept cryptocurrencies as normal currency. The Texas Blockchain Council is on the front line. It is an organization that not only promotes blockchain-related initiatives, but also educates members of the state government about the benefits of blockchain technology and provides advice when politicians are looking for substantive knowledge related to the details of the cryptocurrency and technology market - describes Marcin Wituś, one of the the creators of the Polish cryptocurrency exchange Geco.one.
The 87th legislative session is taking place in Texas, and this is where key decisions about the future of bitcoin can be made. Independent thinking, technological innovation and economic freedom have always been hallmarks of the great state of Texas. We believe forward-looking legislation that encourages innovation is the best approach for Texas to become a leader in this field, wrote Blockchain Council executives in a letter to Texas representatives.
The state of Texas welcomes investors with clear regulations
What is in the law that is still being prepared in committee and may still be amended? In line with the current provisions, definitions of a virtual currency have been introduced, which will be any "digital representation of value that functions as a medium of exchange". The act will also define how cryptocurrencies can be used to make payments and credit disputes. Such regulations will make digital currencies equal to traditional money.
According to experts from the Texas Blockchain Council, this is the first step that will send a signal to companies and institutions using blockchain technology that the state can be a hub for innovative activities. They emphasize that when running a business, unambiguous legal regulations affect the willingness to undertake further investments, because they reduce the risk of unpredictable court decisions.
Legislation is a huge plus as bitcoin and other digital currencies are unclear about the legal status of most US states, meaning judges do not have a dispute resolution plan and parties are unclear about their rights and obligations. Regulation potentially opens the way to more currency trading. More institutions will not be afraid to do their business there, because they see that the state of Texas welcomes them with clear and effective regulations - emphasizes Wituś, whose stock exchange offers its clients transactions on over 16 cryptocurrencies using bitcoin.
The proclaimed act is also important for many companies that already operate in Texas. This state is home to many blockchain-based startups. This is where, for example, the decentralized public network Hedera Hashgraph or the Austin Multicoin Capital Management cryptocurrency hedge fund are located. Also, one of the richest Texans, Mark Cuban, has invested in many start-ups operating in this industry, and is also working on launching a selected NFT gallery and Lazy.com shopping platform.
The act does not end the work
But it's not that Texas legislation is perfect. Experts noticed at least one serious loophole - The draft does not specify how the lender can establish a workable pledge on the virtual currency. This is worrying because, especially in the US, there has been a huge increase in bitcoin-secured loans in recent years - explains Marcin Wituś and adds that the law applied in Wyoming clearly regulates the issue of loans or pledges.
Importantly, Tan Parker also applied to the Texas authorities to create a public-private blockchain working group. It would deal with, inter alia, digital identity regulations, it would look at how blockchain technology can be used to validate and secure credentials.
Who will be next?
So far, only the state of Wyoming has passed a comprehensive blockchain law, but that doesn't mean that others are passively watching the case. As many as seventeen states have adopted even rudimentary regulations related to digital currencies and the technologies behind them.
In the state of New York, the law allows for the processing of signatures, records and contracts secured by blockchain technology in an electronic form. The regulations in California, the innovation center in the USA, are surprisingly poor. This is where Tesla is located, the head of which, Elon Musk, has recently invested nearly $ 1,5 billion in the purchase of cryptocurrency. He also assured that it would be possible to pay for his company's products with bitcoins. In California, like in the state of New York, blockchain technology is accepted only for securing contracts concluded electronically.