On a big day for cryptocurrency in Texas, the Texas Department of Banking gave the green light for state banks to hold and manage crypto assets, last month. Banks will be allowed to offer both fiduciary and non-fiduciary services, including storing copies of keys to a digital wallet on behalf of its customers. The notice comes amid the cryptocurrency world taking off in the last year, specifically in the state of Texas, where crypto startups have been moving. Texas’ affordable energy, combined with less regulations than most places elsewhere in the United States have made Texas a crypto-haven. BIT Mining Limited, a bitcoin mining company based in China, is investing over $25 million in a mining facility in Texas that will be generated by low-carbon energy.
Last month, the Texas House of Representatives passed a bill to make cryptocurrency fall under commercial law. “Other jurisdictions in the United States, such as Wyoming and Nebraska, have been actively embracing crypto custody services by state-chartered banks, with Wyoming chartering Kraken exchange as its first crypto bank last September. Federally chartered banks also received authorization for providing crypto custody services in July 2020,” according to Coin Telegraph.
Daryl Robertson and Patrick Boot wrote in an article for the National Law Review, “The Virtual Currency Bill…provides a clear and concise framework for establishing ‘control’ over virtual currency…and clarifies that control can be established regardless of whether the power to control is shared with another person, a critical element in order for banks and other non-bank financial institutions to effectively provide custody services for virtual currencies.” Robertson and Boot further note/state that “the surgical approach taken by the Bill’s drafters…is a prudent step for a state like Texas…and provides the proper balance to allow the industry to continue maturing while leaving adequate room for additional regulatory changes in the future.”
Texas, more specifically Austin, has become one of the nation’s most attractive cities for tech companies in the last few years, with Apple, Tesla, Dell and others all having corporate offices in the Texas capital. With Bitcoin on the rise, Texas could soon become the crypto-state once the bill is signed into law.
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