Texas New Law Makes Crypto "A Thing" ⚖

Texas New Law Makes Crypto "A Thing" ⚖

By SirK133 | CryptoCat | 12 May 2021


If cryptocurrency succeeds in what it's meant to do it will change the world. This series documents this process. Also, knowing what crypto is caching on in the "real world" might be beneficial for your portfolio.

Today we have a big one - Texas lawmakers passed a proposed amendment to the state’s Uniform Commercial Code, that aims to better adapt commercial law to blockchain innovation and digital asset regulations. House Bill 4474 will define cryptocurrencies in the Texas law system. 

A "Virtual currency" means a digital representation of value that functions as a medium of exchange, unit of account, and/or store of value and is often secured using blockchain technology.

It might seam small and boring for us, since probably all readers of this post have some crypto, but in the legal aspect it's not small at all. Notice I didn't write "own some crypto" - chances are (it depends on the law in your country) that you don't really own cryptocurrency, because it is not "a thing" that can be owned. If it got stolen, proving the value of the damage you sustained due to that fact might be more troublesome than you think. Also, if you paid with crypto, in some jurisdictions it might have been considered as... well many things, a barter deal for example - which might amount to quite a mess when it comes to filling taxes by the vendor, who might in turn want to avoid it by staying as far from crypto as he can.

When business makes decisions (like whether to adopt crypto or not) first thing it tends to look are not opportunities, it's often risks. The most deterring kind of risk is the "known-unknown", meaning a risk that you know is there, but you have no idea about how to deal with and what damages it might cause. That's why, as a lawyer, I think this simple line, that sounds like it was a dictated by Cpt. Obvious, is a big deal. If it passes, in Texas anyone who wants to engage with crypto will be able to asses what law applies. For now in Texas, but you can see the trend here... 

Also, reportedly the bill allows the purchaser to share “the power with another person,” thus making it possible for financial institutions to engage in crypto custody. 

Now it will have to clear the Senate for any proposed amendments and a final vote. Should the crypto legislation pass the Senate, Texas Governor Greg Abbott can sign the bill into law and potentially establishing a second state in US as a major crypto hub, after Wyoming. This last step should go smoothly since Abbott already voiced his support:     

 

I look forward to the recognition from the lawmakers that crypto deserves. For now it was mostly focused on taxation, so most governments waned to make some quick, indirect, bucks on crypto while sounding the alarm on risks and volatility by institutions like SEC, doing more harm than good. This simple amendment create something you might call "a bridge to law ecosystem" and much like our interchain bridges it allows for one asset, in this case crypto, to exist and develop in very different environment, enriching both of them. 

Oh, I almost forgot - yeah, that's bullish 😸

May your coins be like cats - eager to climb and unable to come down,
Cryptocat

 

All tips go to cat treats and catnip 😻
This is not a financial advice – I’m no financial adviser, nor is this a legal advice – although I’m a lawyer. This is no advice at all, seriously, don’t take advice from random cats – the Internet is full of them! DYOR!

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SirK133
SirK133

Lawyer, analyst, crypto enthusiast, gamer, poet. I am interested in everything that makes up our world and how it is related.


CryptoCat
CryptoCat

My cat so often stomps the keyboard while I do my crypto research, I might as well make him a co-host here.

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