The state of Texas is making significant progress in the regulation of the cryptocurrency industry with the recent approval by the House of Representatives of the digital asset service provider bill. This bill, also known as the “Proof of Reserve” bill, seeks to regulate exchanges and other companies that offer crypto-related services.
Introduced in January by Giovanni Capriglione, the bill defines a digital asset service provider (DASP) as an electronic platform that facilitates the trading of digital assets on behalf of a customer and maintains custody of the customer’s digital assets. The bill mandates that DASPs hold customer funds in reserve and regularly disclose these holdings to the Texas Banking Department. Companies will also have to disclose their liabilities owed to customers.
Through these regulations, Texas aims to protect investors and customers from situations like FTX and Celsius, where customer funds got stuck when the companies collapsed. If the bill passes, it will become a law once it’s approved by the Senate and the Governor.
Aside from this bill, Texas is also pushing for more regulations in the crypto industry. The state is reviewing a bill that seeks to remove benefits and subsidies for cryptocurrency miners and limit their participation in the state’s demand response program for electricity. This bill, called SB 1751, has received significant pushback from the crypto industry for being too heavy-handed.
Crypto proponents claim that this bill will adversely affect over 20,000 rural jobs created by the mining industry in recent years and slow future growth. Additionally, the bill is expected to raise the cost of key grid services for consumers if passed as miners currently provide these services at the lowest cost.
The state of Texas is among the most active in terms of establishing regulations for the cryptocurrency industry. With multiple bills pushed through the House, the state is committed to providing a regulatory framework that protects investors and customers while allowing for the growth of the industry.