Republican Texas House of Representatives member, Phil Stephenson, has reportedly introduced a bill to ban the anonymous use of crypto. The bill would require residents of the U.S state of Texas to identify themselves if they wish to use cryptos. The bill dubbed H.B. No. 4371 details that users who transact (send and receive) digital tokens must be known. However, if a user decides to use a “verified identity cryptocurrency,” this means they do not have to submit a verification to the state of Texas.
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House Bill 4371 Intends for Texas Crypto Users to Pass Through An Identity Verification Process
Per the report, Texas could be set to become the first U.S state to ban anonymous cryptocurrency usage. Representative Stephenson, who is a certified public accountant (CPA) and staunch Texas Republican, wants residents of Texas to verify their identities should they choose to use cryptos. Stephenson’s H.B. No. 4371 bill states that if the new legislation is passed, it will be effective from Sept. 1, 2019. Per Section 662.02 of the bill, before accepting digital currency payment, an individual must verify the identity of the sender. The receiver doesn’t need to verify their identity should the payment be sent through a verified identity cryptocurrency.”
Attacking the Use of Cryptocurrencies Anonymously
H.B. No. 4371 further states:
Texas may not use a crypto that doesn’t qualify as a verified identity digital currency. The Credit Union Commission, the Texas Department of Banking, the Texas Department of Public Safety, and the State Securities Board will collaborate to facilitate the usage of verified identity cryptocurrencies.
Stephenson’s bill indicates that agencies mentioned above will give the public the right tools that will allow them to know the difference between what a verified identity digital currency means and a crypto that offers anonymity. Stephenson, who won his seat recently against his Democratic challenger Jennifer Cantu, remarks that his CPA can assist the state in financial issues. However, Texans for Fiscal Responsibility, a free-market nonprofit organization gave Stephenson a 40% favorable rating. This rate is very low for a Republican congressman.
News of the Proposed Legislation Raised Concerns Among Crypto Advocates
Crypto proponents were critical of the news that a bill set to ban the anonymous use of digital currencies was submitted. Andrew Hinkes, who co-founded Athena Blockchain a company he serves as general counsel said via his Twitter handle:
“Congratulations Texas, you are the first U.S. state to formally attack and try to ban the anonymous use of crypto in the country.”
Hinkes went on to add:
Other questions: is there any existing digital currency that really qualifies as a ‘verified identity virtual currency’ as defined? Is it state issued? What level of ‘ID’ is required to be ‘verified’? Are only four state administrative bodies the proper entities to ‘promote’ such a digital currency?
It’s safe to say a majority of crypto supporters were disheartened when news about the bill came to light. Texas is renowned for being a digital currency friendly region. If the bill passes and becomes legislation, it could affect business operations in the state. It could add a wide range of challenges for privacy advocates.