Cryptocurrency has recently gained popularity in the United States. While some states have been staunchly opposed to the legalization of cryptocurrencies and blockchain technology, others have welcomed it with open arms.
Texas is one of these states, having approved two bills that would incorporate cryptocurrency and blockchain technology into its business legislation. Texas House Bills 1576 and 4474 were approved by the Texas legislature and Texas State Governor Abbott in May and June, respectively. These bills would effectively legalize cryptocurrencies in the state. The implementation date was set for the beginning of September.
Laws Become Effective
Both state bills are aimed at different segments of the industry. Texas House Bill 1576 would create a blockchain working group in the state. Texas House Bill 4474, on the other hand, would amend the state’s current Uniform Commercial Code to include cryptocurrencies in commercial law. Texas is now the fourth state to include cryptocurrencies in its commercial law. Wyoming, Rhode Island, and Nebraska are in second and third place, respectively.
Lee Bratcher, president of the Texas Blockchain Council, told us that Texas House Bill 4474 would better define cryptocurrencies’ security interests. This would “allow institutional investors to get involved with sizable investments.” House Bill 4474 also includes a definition of “virtual money,” which is defined in the Texas Business and Commerce Code as “a digital representation of value that functions as a medium of exchange, unit of account, and/or store of value, and is frequently secured using blockchain technology.”
“This is good for crypto in general,” said Lee Bratcher. “As a result, parties to transactions have clarity about their legal rights and obligations, judges have a roadmap for resolving disputes, and lenders know they have an enforceable lien on the crypto pledged as collateral for collateralized loans.”
Texas is becoming a hub for cryptocurrency mining.
Following China’s crackdown on miners, which resulted in a mass exodus of miners, Texas has welcomed mining operations with open arms. One of the reasons the state is so appealing to crypto miners fleeing China is its legal protection for businesses. Certain that the events that precipitated their departure from China would not occur in Texas.
Another example is Texas Governor Greg Abbott’s vocal support for cryptocurrencies. This has made miners feel welcome, knowing that the state’s leadership supports their mining activities.
Energy has also played a significant role in this decision. China’s crackdown on miners was motivated primarily by concerns about energy and pollution. As a result, cryptocurrency miners are looking to set up their operations with more renewable energy than they did previously. And Texas is ideal for it. The state has an abundance of renewable energy sources, such as wind and solar, which would provide the miners with the power they require to power their rigs. However, the environment is not being harmed as much.