The Governor of Texas, Greg Abbott, a truly great governor, has signed into law something called the Virtual Currency Bill which began life as House Bill 4474 as sponsored by Representative Tan Parker a huge supporter and proponent of blockchain technology and cryptocurrency.
The bill was considered by the Texas House of Representatives’ Pensions, Investments, and Financial Services Committee which revised the bill after extensive hearings and public input into a Committee Substitute Bill which they passed with bipartisan support in the middle of April.
This bill is not some vague expression of support, but makes specific changes to the Texas Uniform Commercial Code by defining exactly what cryptocurrency is:
“A digital representation of value that:
(A) is used as a medium of exchange, unit of account, or store of value; and
(B) is not legal tender, whether or not denominated in legal tender.”
This was done by inserting a new chapter and modifying one chapter in the Uniform Commercial Code which will now be translated into specific rules by the Uniform Law Commission. The ULC targets 2022 as the date to issue the new rules.
Two specific changes are worthy of note:
1. Texas banks can now provide custodial services even if the control is shared with another person which surgically addresses the manner in which custodial accounts are actually created and administered.
2. Texas banks can perfect liens against cryptocurrency which creates a practical basis to include crypto as an asset against which an owner can borrow. This is a big practical step and takes cryptocurrency from the shadows into the light. A Texas bank can lend against cryptocurrency.
Bottom line it, Big Red Car, lunch plans today
Fine, dear reader, don’t want to keep you from the feed bag, here it is:
1. Texas is the second largest state economy in the nation and the 9th largest economy in the world and through this bill lays out a welcome mat for the inclusion of cryptocurrency in the mainline of American business as conducted in Texas. Yeeehaw!
2. Texas is the second state to provide clarity and regulatory recognition for cryptocurrency in the nation with Wyoming being the first.
3. The Texas bill had widespread partisan support and was a change to the state’s Uniform Commercial Code, not some obscure ruling or indulgence. It is mainstream.
4. At least 25 other states are considering similar actions in current legislative sessions. When Texas acts, other states follow.
This is one more example of the “Texas friendly” business environment in the Lone Star State.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.