Crypto became “Officially Legal” in Texas this month
Takeaways–
- Texas amends state code to recognize crypto
- Allows framework for institutional adoption
- Sets a precedent for other states to follow suit
- Miners flooding into small Texas towns
Texas, Florida and Wyoming are all jockeying for position to become the most crypto friendly state in the Union. And this month, Texas will officially recognize cryptocurrency as legal, setting the stage for Texas to unleash crypto innovation like almost no other state. Part of the fabric of Texas culture is to support free markets and innovation–crypto is no different. Texas has welcomed miners from the moment the Chinese miner exodus occurred. This was spurred by cheap energy costs and friendly regulatory schemes. This paradigm shift has taken the reigns of innovation from the likes of San Francisco and Silicon Valley to places like Texas. This is because crypto is the hottest thing to be “innovating” right now, and Texas is taking full advantage.
Bitmain Mining Facility Ribbon Cutting
In May, House Bills 1576 and 4474, passed and of Sept 1 crypto has now become officially and legally recognized in the state. House bill 4474 “adds the definition of the term “virtual currency” into the state’s Uniform Commercial Code, the set of laws that govern business transactions in Texas.” The law defines virtual currency as a “digital representation of value that functions as a medium of exchange, unit of account, and/or store of value”. The store of value aspect is interesting as many would argue, against other assets, that is the main reason people hold crypto. That is to say, knowing things like DeFi will be built on top of smart contract chains, among other things, many would argue functioning Layer 1 chains are by default stores of value, in terms of an investment thesis.
Texas has even set up a Blockchain Council to spur development and research the space. According to Lee Bratcher, the president of the Council, House Bill 4474 allows “institutional investors to get involved with sizable investments.” When you read the bill, it is actually designed to protect holders of crypto. In the bill, it mentions “prevent[ing] others from deriving substantially all of the benefit from the virtual currency”. Wyoming, Texas and Florida have all been working to create legal frameworks around crypto, which will only drive adoption nationwide. They took it so serious in Texas that they actually amended the states Uniform Commercial Code to recognize crypto under commercial law. Moreover, banks will be able to “custody crypto” under certain circumstances–another boon for adoption.
Crypto advocate Caitlin Long of Wyoming said of Texas: “This means parties to transactions have clarity in their legal rights and obligations, judges have a roadmap to adjudicate disputes, and lenders know they have an enforceable lien on the crypto pledged as collateral for loans”. Wyoming has had a Digital Asset Law on the books since July 2019, and Texas is following suit, with their Governor Greg Abbott calling himself a “crypto supporter”. He has since made good on those words.
Texas is home to mining firms like Blockcap, Riot, and others. According to Chinese miners who moved to Texas, the legal protection for their business was the main attraction, and Chinese miners are already making their way in Texas, adorned with Cowboy hats and all. Abbott claims “Texas will become the crypto leader” and it is already happening as Chinese mining giant Bitmain is expanding its facility in Rockdale, Texas. The small town of 5,600 is now set to become a major Bitcoin mining mecca in the world–bringing jobs, capital, and development.
At the end of the day, it makes sense that it would be Texas, as one Bitcoin miner said: “Texans take their freedom and rights very seriously, and so do we bitcoiners.”
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Text source: CryptosRus
