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- To catch up with other crypto-friendly states, Texas will have to modify its state constitution, according to experts
- According to the state’s commercial law, Texas has enacted two legislation to recognize cryptocurrencies
- It’s crucial to note that, while this defines the commercial law status of digital assets, Texas isn’t the first state to pass laws of this nature
Texas wants to catch up to and surpass other crypto-friendly states, but experts say that altering the state constitution will take time. Everything is bigger in Texas, so it’s no wonder that the Lone Star state is preparing to become the country’s next Bitcoin (BTC) hotspot.
Two bills have been passed by Texas on Bitcoin
Texas has passed two bills that ensure bitcoins are recognized under state business law. Texas House Bills 4474 and 1576 went into effect on September 1 after Governor Greg Abbott signed them into law in June. While H.B. 1576 formed a blockchain working group in Texas, H.B. 4474 establishes a comprehensive framework to show that virtual currency has a legal basis in the state.
The proposed language of the Uniform Law Commission’s new Uniform Commercial Code, or UCC, was adopted in H.B. 4474. Although UCC Article 12 is expected to be approved next year, governments have the option to adopt the suggested text in the meantime, as Texas’ H.B. 4474 demonstrates. According to Patrick Boot, an associate at Hunton Andrews Kurth, the text of H.B 4474 simply highlights three key points: It defines virtual currency and establishes how to demonstrate control over it, as well as how to be a qualified purchaser. Finally, it demonstrates how to perfect a security interest, which is quite useful when dealing with virtual currencies.
To put the significance of H.B. 4474 into context, Joseph Kelly, CEO of Unchained Capital, a Bitcoin financial services company based in Austin, told Cointelegraph that as a result of Texas’ cryptocurrency laws, Unchained and its clients now have greater legal certainty surrounding activities like purchasing Bitcoin or accepting it as collateral for loans.
From legislation to a constitutional amendment, they have come a long way
While Texas looks to be following in the footsteps of other forward-thinking states, representatives of the Texas Blockchain Council, an industry group that promotes for blockchain-centric public policy initiatives, indicated that the state has bigger plans in the works.
According to Lee Bratcher, head of the Texas Blockchain Council, there are efforts underway to include Bitcoin into the Texas Constitution, maybe through a constitutional amendment. The Texas Constitution has been modified more than 500 times, according to Bratcher. As a result, he believes that a Texas state amendment allowing cryptocurrencies to be used for property tax payment is a possibility. Bratcher made the following remark: A Texas constitutional amendment to allow property tax payments in Bitcoin has been proposed. At the Texas Comptroller’s Office and Treasury, Bitcoin would be on par with gold.
While the incorporation of Bitcoin into the Texas Constitution may be a first for crypto-friendly states, Bratcher stated that such a proposal would not be on state ballots until 2023: This proposal will most likely take years to complete. Meanwhile, Bratcher stated that the Texas Blockchain Council is collaborating on this project with Texas House Representative Giovanni Capriglione.
Texas intends to go above and beyond simple legislation by incorporating a Bitcoin amendment into the Texas Constitution. According to Peter Vogel, a partner at Foley & Lardner LLP, constitutional amendments in Texas need a citizen vote, which is a higher legal bar than established statutory laws signed by the governor.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
