• Texas Senate approved house bill 1666, which requires digital asset providers to have sufficient reserves to cover all customer withdrawals
• The legislation now only needs Governor Greg Abbott’s signature to become law
• In April, the Senate passed a measure to restrict cryptocurrency mining incentives in addition to the proof-of-reserves law
Proof of Reserve Legislation Closer To Becoming Law in Texas
The state Senate of Texas recently approved House Bill 1666 which would require digital asset providers with over 500 customers and more than $10 million worth of customer funds to have enough money in reserve to cover all possible withdrawals. This bill now only needs the approval from Governor Greg Abbott for it become a law.
Protection For Virtual Currency Ownership
In addition, legislators in Texas amended the state’s Bill of Rights by adding an article that would protect people’s ability to own, keep and spend virtual currency. This move is expected to bolster crypto adoption further within the state.
Cryptocurrency Mining Restrictions
In April this year, the Senate also passed another measure that restricts cryptocurrency mining incentives along with the proof-of-reserves law mentioned above. Companies providing services related to cryptocurrencies are required by law to disclose their outstanding debt amount every fiscal year end at Texas Department of Banking within 90 days or face permit cancellation if standards aren’t met.
Transparency A Necessity
The amendments also prohibit companies from using customer funds for purposes other than what was requested and comingling them with any other type of operational capital. These measures are intended towards ensuring transparency on behalf of exchanges and service providers dealing with cryptocurrencies in order ensure user safety while using these platforms.
Texas is one among many states that has taken proactive steps towards regulating cryptocurrency businesses operating within its jurisdiction as well as protecting users‘ rights and security when dealing with cryptocurrencies.