Governor Abbott and the Texas Department of Banking have endorsed cryptocurrency - TCR
- Texas now has the right to custody digital currencies
- Abbott stated that blockchain is a thriving industry in which Texas must be concerned
- After Wyoming, Texas is the second state to recognize blockchain and Cryptocurrency
The value of digital currencies skyrocketed as a result of the pandemic, and Texas does not want to be overlooked in terms of future growth. The Texas Division of Banking issued an industry notice on Thursday informing state-chartered banks that they now have the authority to provide custody (or safekeeping) services for digital currencies. There were 216 Texas state-chartered banks regulated by the Division of Banking as of the beginning of February.
The governor of Texas, Greg Abbott, has announced plans to expand the state blockchain sector
Gov. Abbott stated on his personal Twitter account on June 5 that Blockchain is a booming industry that Texas needs to be involved in. He recently signed a bill requiring Texas to develop a master plan for the blockchain industry’s expansion. The governor, who was elected in 2015, has long been a supporter of cryptocurrency. Back in 2014, he even invited the bitcoin community to his election campaign. In March, he stated that he supports a cryptocurrency law in Texas, saying that count him in.
He stated that cryptocurrencies are increasingly being used for transactions and are beginning to enter the mainstream as an investment. Texas should take the lead here, just as we did with the gold depository. Since then, Texas legislators have passed legislation to create a legal framework for cryptocurrency investments in the state. According to reports, the bill had passed to Gov. Abbott’s desk for his signature on May 28.
For Texas, Marcus Adams’ thoughts on digital currencies
The state banking division’s assistant general counsel, Marcus Adams, said, Texas is seeing the rise of the digital foreign money business and is attempting to get ahead of it to ensure our regulated banks are ready to stay competitive. This isn’t a brand new law, but rather the state recognizing that current legislation permits it.
If a buyer owns Bitcoin or another digital currency, it means they have personal keys in their pockets that allow them to access their funds. In Texas, however, that responsibility will be transferred to a third-party financial institution. Because it handles necessary paperwork, the financial institution can either store a copy of the important thing, or the shopper can completely transfer the digital foreign money to the financial institution.
Just because some banks are capable of handling this new function does not mean they will all do so. Banks, according to Adams, must assess whether they have the proper risk management in place to take action.
Texas is the second state to recognize blockchain and cryptocurrency after Wyoming
The clarification of Texas law comes just days before Texas Governor Greg Abbott is expected to sign the “Digital Forex Invoice,” recognizing the legal status of digital currencies, in the next two weeks. After Wyoming, Texas would be the second state to recognize blockchain and cryptocurrency in its Uniform Industrial Code, which regulates business transactions. Blockchain is a booming industry in which Texas should be interested. Abbott tweeted last week that he just signed a bill for Texas to create a master plan for growing the blockchain business in Texas.
The bill includes a definition of cryptocurrency in the industrial code as well as basic legal guidelines for crypto firms. It lays out the rights of digital foreign money holders in particular, including the authority to regulate foreign money even when it is administered by a third party. This could be why the division felt compelled to issue a business notice explaining how banks can protect digital currencies. The Digital Forex Invoice is similar to the Digital Asset Invoice issued in Wyoming in 2019, which helped the state establish itself as a bitcoin buyer’s hub. Wyoming has taken the lead in developing legal guidelines to help digital foreign money businesses operate in the state.