Texas takes action to amend Bitcoin in state constitution

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Everything is bigger in Texas, which is why it shouldn’t come as a surprise that Lone Star State is making moves to become the next Bitcoin (BTC) hotspot in the Americas.

Most recently, Texas implemented two laws to ensure that cryptocurrencies are recognized under state commercial law. Texas House Bills 4474 and 1576 both came into effect on September 1, after being promulgated by Governor Greg Abbott last June. While HB 1576 established a blockchain task force in Texas, HB 4474 provides a comprehensive framework to demonstrate that virtual currency has a place under Texas law.

Specifically, HB 4474 adopted the proposed wording of the new Uniform Commercial Code of the Uniform Law Commission, or UCC. UCC Article 12 is expected to be finalized next year, but states are free to adopt the proposed language in the interim, as Texas HB 4474 demonstrates. Patrick Boot, partner at Hunton Andrews Kurth, a told Cointelegraph that the text of HB 4474 concisely states about three specific things:

It defines virtual currency, while also establishing how to show control over virtual currency, or how to be an eligible buyer. Finally, it shows how to perfect collateral, which is extremely useful for doing business with virtual currencies.

To put the importance of HB 4474 into perspective, Joseph Kelly, CEO of Unchained Capital, an Austin-based Bitcoin financial services company, told Cointelegraph that due to Texas cryptocurrency laws, Unchained and their customers now enjoy greater legal certainty regarding activities such as purchasing. Bitcoin or accept it as collateral for loans.

Prior to HB 4474, Kelly mentioned that Bitcoin was too new and different, noting that previous laws were not well suited for commercial transactions with Bitcoin. In turn, Kelly explained that unclear definitions or uncertain legal treatments for Bitcoin create unnecessary risk for all parties: of funds. “

While this clarifies the status of digital asset commercial law, it’s important to note that Texas was not the first state to pass such legislation. Caitlin Long, a Wyoming-based crypto supporter, previously told Cointelegraph that Texas became the 4th US state to define virtual currency, behind Wyoming, Rhode Island and Nebraska.

From legislation to constitutional amendment

While Texas appears to be following in the footsteps of other innovative states, members of the Texas Blockchain Council, an industry association that advocates for blockchain-centric public policy initiatives, have said larger projects are underway. In progress.

Lee Bratcher, chairman of the Texas Blockchain Council, told Cointelegraph that there are discussions to incorporate Bitcoin into the Texas Constitution, potentially as a constitutional amendment. According to Bratcher, the Texas Constitution has been amended over 500 times. As such, he noted that an amendment from the State of Texas related to the use of cryptocurrency for the property tax payment function is a possibility. Bratcher noted:

There is the idea of ​​a Texas constitutional amendment to allow the payment of property tax in Bitcoin. This would put Bitcoin on par with gold at the Texas Comptroller’s Office and the Treasury.

While the incorporation of Bitcoin into the Texas Constitution may very well be a first for pro-crypto states, Bratcher mentioned that such a proposal would not appear on state ballots until the year 2023. : this proposal will probably take years. In the meantime, Bratcher mentioned that the Texas Blockchain Council is working closely with Texas House Representative Giovanni Capriglione on this project.

It’s also important to point out that other states such as Florida and Tennessee have recently explored ways to accept BTC for the payment of property tax. Jackson, Tennessee Mayor Scott Conger announced in July of this year that the city’s blockchain task force was exploring ways to enable the payment of property taxes in Bitcoin. The news came shortly after Miami Mayor Francis Suarez announced pressure to have city employee salaries paid in BTC, while allowing residents to pay fees in Bitcoin.

By implementing a Bitcoin Amendment to the Texas Constitution, Texas aims to go beyond pure legislation. Peter Vogel, legal counsel at Foley & Lardner LLP, told Cointelegraph that constitutional amendments require a vote from the citizens of Texas, which would be a stricter legal standard than crypto laws enacted by the Texas legislature and signed by the governor. .

Challenges to consider

Even as Texas takes unique steps to become one of the most crypto-friendly states in the United States, challenges remain that could hamper the advancement of the legislation.

For example, Bratcher pointed out that the biggest obstacle to the continued growth of cryptocurrency in Texas is Washington, DC. countries like Switzerland and Liechtenstein: We have no control over the biggest problems we see at the federal level.

Related: Crypto Cowboys: Texas Counties Welcome Bitcoin Miners With Open Arms

This notion may have come to light recently with the United States Securities and Exchange Commission threatening to sue Coinbase for its crypto yield program. With that in mind, Bratcher noted that even though there is a positive crypto ecosystem in Texas, the Texas Blockchain Council is still trying to make wiggle room with the States Securities Board. According to Bratcher, the Texas State Securities Board has been strict about interest-bearing accounts.

Additionally, Vogel said that while Texas has passed and enacted crypto friend legislation, it’s important to see how these laws will be challenged in Texas and federal courts:

Until lawsuits are brought to present these laws to judges, it remains unclear how judges will decide to interpret either the constitutional amendment or the laws enacted. Nonetheless, if voters in Texas pass a constitutional amendment, it would be an important step in how crypto is viewed from a broader social perspective.

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