The Lone Star State has sent a ripple across the cryptocurrency landscape, signaling a new era of financial accountability. In a groundbreaking move, Texas’ Senate recently passed House Bill 1666, a legislation designed to enforce stringent ‘proof-of-reserve’ requirements on cryptocurrency exchanges.
This legislation could require cryptocurrency exchanges to maintain reserves “in an amount sufficient to fulfill all obligations to customers”. Following its passage in the Senate, the bill now only needs the governor’s signature to become law.
The move is seen as a part of the state’s proactive legislative approach to cryptocurrency, establishing Texas as a forerunner in regulating this nascent industry. The bill had earlier made its way through the Texas House of Representatives without encountering significant amendments to its text.
One crucial aspect of the amendments is the restrictions placed on digital asset providers servicing more than 500 customers within the state and holding at least $10 million of customer funds. These providers are barred from mixing customer funds with any operational capital and using customer funds for transactions other than those demanded by the customer.
In addition, the legislation obliges these exchanges to maintain sufficient reserves to meet potential withdrawals at any moment. This mandate provides an additional layer of security for customers, ensuring their funds remain accessible and secure.
However, the bill doesn’t stop at mere compliance. It incorporates measures for enforcing these provisions, empowering the Texas Department of Banking to revoke licenses of providers who fail to meet these requirements.
The proactive stance of Texas legislators towards crypto doesn’t end here. Another bill aimed at limiting incentives for crypto mining was also approved by the Senate in April. Further, an amendment was made to the state’s Bill of Rights to acknowledge individuals’ rights to possess and utilize digital currencies.
As we observe this wave of regulatory advancements, it is clear that Texas is setting new precedents in the realm of digital currency, thus shaping the future of this evolving industry.