Cryptocurrencies have received official recognition in Texas after the adoption of two bills aimed at developing the cryptocurrency and blockchain industry.
Both bills, numbered HB 4474 and HB 1576, officially entered into force on September 1 after being passed by both houses of the state legislature in May. The documents were signed by Governor Greg Abbott in June.
Bill 4474, introduced by Congressman Tan Parker in March, aims to define cryptocurrencies in the state’s Unified Commercial Code.
According to Lee Bratcher, President of the Texas Blockchain Council, Bill 4474 defines a security interest for bitcoin and other cryptocurrencies and allows institutional investors to participate in large investments in digital assets.
Bill 1576 establishes a blockchain working group in Texas to enact commercial law regarding blockchain innovation and digital asset regulation.
Now that the bills have come into force, there is legal clarity in the state for the definition of cryptocurrencies. The laws will provide a set of guidelines for Texas-based companies looking to enter the cryptocurrency business.
Texas banks have already received approval from the Texas Department of Banking to provide storage services for virtual currencies.
Texas’s crypto-friendly approach comes as no surprise as Governor Abbott is a cryptocurrency proponent. He is believed to have stimulated mining companies in Texas.
With China’s crackdown on crypto mining, Texas has become home to cryptocurrency mining companies such as BlockCap and Riot Blockchain. Both companies plan to expand their mining capacity in the state through the purchase of new equipment.
Texas became another US state after Wyoming and Nebraska to recognize blockchain and cryptocurrency.
Wyoming became the first crypto-friendly state by passing the Digital Assets Act on February 26, 2019, which went into effect on July 1, 2019. Since then, Wyoming has attracted various large firms, including Ripple.
Last September, the Wyoming Banking Council approved Kraken as the first crypto bank. Kraken earned the status of the first specialized depository institution in the state.
The banking council later granted Avanti Financial the right to receive and store cryptocurrency in the state.
This May, Nebraska also passed legislation allowing state banks to provide cryptocurrency-related services to clients.
Other states are ready to follow suit and pass cryptocurrency laws. About 25 states are already considering blockchain and / or digital asset bills in their 2021 legislative sessions. Among them are Pennsylvania, South Carolina, Nevada, Kentucky and others.