Late last month, Gov. Greg Abbott tweeted his support for blockchain technology, writing “count me in as a crypto law supporter,” potentially setting the state’s current legislative session to increase its focus on the tech.
Abbott’s announcement was in response to a Cointelegraph article which looked at some of the legislative barriers companies working in the blockchain space face in Texas. And as the Texas’ 87th Legislative Session picks up steam, the Texas Blockchain Council is spearheading a push to get a number of bills passed one of its biggest focuses is on the passage of H.B. 4474.
“Independent thinking, technological innovation and economic freedom have always been hallmarks of the great state of Texas,” leadership of the Texas Blockchain Council wrote via email to NTX Inno. “We feel that forward-thinking legislation that encourages innovation is the best approach for Texas to become a leader in the space.”
Denton County District 63 House Rep. Tan Parker introduced the bill, in collaboration with the council, which would amend that state’s Uniform Commercial Code define what a virtual currency is, as well as how a currency controlled and used in trade. Under the bill, which is still in committee, a virtual currency is defined as a “digital representation of value that functions as a medium of exchange,” giving multiple blockchain-enabled cryptocurrencies to be used. The bill goes on to define how a digital currency could be used in making payments and in loan disputes.
Leaders of the Texas Blockchain Council said the bill represents a first step in signaling blockchain-related businesses and institutions that the state can be a hub for innovative activity. According to the Brookings Institution, Texas is labeled “reactionary” when it comes to fostering initiatives for the technology’s growth. As Daily Adoption News notes, H.B. 4474 would help by giving judges a guide on how to rule on cases involving a cryptocurrency’s use, potentially opening the way to more trade with the currency.
“We want those institutions to be doing business in Texas because they see the signal that Texas is welcoming them with clear and effective regulation,” the council wrote.
Recently, large financial players like JPMorgan and Goldman Sachs have taken steps to adopt bitcoin as a legitimate asset class. Texas is also home to a number of blockchain startups, with one of the most notable being Richardson-based decentralized public network Hedera Hashgraph, which has been working with the Texas Blockchain Council on an initiative to push Texas’ Secretary of State office to adopt the technology for authenticating and securing records. In the capitol city, Austin cryptocurrency hedge fund Multicoin Capital Management, which raised at least $75 million for a flagship fund in 2018.
H.B. 4744 isn’t the only the Texas Blockchain Council and Rep. Parker are looking to get passed this legislative session. Parker has also filed H.B 1576, which seeks to create a public-private work group on blockchain matters to help guide future legislation, along with H.B. 2199, which would create a digital identity work group look at ways blockchain technology can be used to validate and secure various IDs and credentials. Both of those bills, which the council has been involved in, have passed through committee. Last legislative session, Parker introduced a similar blockchain working group bill that did not make it to a vote.
“If they are made into law, we will be working closely with both of these groups to ensure that Texas’s point of view on blockchain and digital identity empowers citizens, protects their privacy, and doesn’t overburden companies with regulation,” the council wrote
Another bill the Texas Blockchain Council is supporting is S.B. 334, which it says will provide more clarity around blockchain-anchored digital signatures.
The Texas Blockchain Council is led by President Lee Bratcher, who also serves as the executive director for the Institute of Global Engagement at Dallas Baptist University; VP of operations Michael Lewellen, the CEO of North Texas blockchain startup Tarski Technologies; and advisors Natalie Smolenski and Mance Harmon, who together make up the council’s executive board.
Outside of hoping to get specific bills passed, the council unveiled one of its most recent initiatives. In a partnership with the Chamber of Digital Commerce, it released a Texas-specific version of the chamber’s “Legislator’s Toolkit for Blockchain Technology,” which highlights a number of other proposals including the creation of “regulatory sandboxes,” developing tax credits and write-offs and considering allowing municipal bonds to be issued using blockchain technology.
“Blockchain and [distributed ledger technology] have enormous potential for innovation and economic growth, but this potential will not be realized in Texas or the United States without the support of policymakers,” the toolkit states. “Policymakers can work with innovators to craft responsible statutes and regulations that provide the clarity and flexibility necessary to stimulate blockchain development.”
Among other representatives like Giovanni Capriglione of Austin, business leaders in the state have been pushing for the wider adoption of cryptocurrencies and blockchain-related technology. Dallas billionaire investor Mark Cuban has made investments in a number of startups operating in the space and is also working on launching a curated NFT gallery and marketplace called Lazy.com. In addition, Elon Musk whose companies SpaceX and Tesla have a large presence in the state, has been championing the use of cryptocurrencies and recently announced the electric car company bought $1.5 billion worth of bitcoin.
The Texas Blockchain Council’s efforts are aimed at pushing Texas to become a leader in the technology, comparing its adoption and innovation as the 21st century’s version of the space race. It also noted that other states like Wyoming have already passed legislation promoting blockchain, along with larger players like China and the European Union.
“Just as Texas played an outsized role in helping the United States win the space race… Texas elected officials, state agencies, businesses, universities and entrepreneurs are teaming up to ensure that the internet of value enshrines our freedoms and entrepreneurial opportunity for everyone,” the council wrote.
