Texas House Bill 4371 – Section 662.02 -to Prevent Anonymous Transaction of Cryptocurrencies

Texas House Bill 4371 – Section 662.02 -to Prevent Anonymous Transaction of Cryptocurrencies

March 13, 2019 Off Steven Anderson By Steven Anderson

The erratic movements of the cryptocurrency trend lines did drive nuts to several investors. However, the open yet anonymous and secure nature of the crypto remains an exciting factor.  But, here is the unpleasant news: A Bill in Texas might make it impossible to transact cryptocurrency anonymously.

The Texas House Bill 4371 requires cryptocurrency users based in Texas to verify their identities.

Phil Stephenson, a staunch Texas Republican and Certified Public Accountant (CPA) requires that the residents should verify their identities if they are willing to use the cryptocurrency.  If all goes well and the bill becomes a law, the rule will come in to effect from September 01, 2019.  Constituent elements of Section 662.02 details the rest of the phrases and clauses that make the law. 

H.B. No. 4371, therefore, stated: “Texas may not use a digital currency that is not a verified identity digital currency — The Texas Department of Banking, Credit Union Commission, Texas Department of Public Safety, and State Securities Board shall collaborate to encourage the use of verified identity digital currencies.”

The bill also requires that the agencies who are offering cryptocurrency services will facilitate the users with the tools necessary to differentiate between anonymous digital currencies and those that facilitate for verified identity in the transactions.

Clearly, cryptocurrency advocates are frustrated about the news. 

Andrew Hinkes questioned: “Other questions: Would any existing cryptocurrency or digital currency qualify as a ‘verified identity digital currency’ as defined? What level of ‘ID’ is required to be ‘verified’? State issued? Are four state administrative bodies the right entities to ‘promote’ a digital currency?”

Regulation is unavoidable.  Nations are taking to a positive trend when it comes to permitting the use of cryptocurrency; however, they are now trending towards breaking the anonymity in transactions.

The Indian Government confirmed recently that their regulation is in the final stages. Regulation will provide the needed freedom for the industry to thrive and expand. 

Colorado has exempted cryptocurrencies from the securities laws.  Governments are getting to be precise.  Several investors have realized their losses after investing in this market, and they are not sure of how to report their losses 

Hester Peirce, the Crypto mom, voiced her support for internal regulation in the cryptocurrency market providing a flexible approach to: “the whole purpose of the Bitcoin idea.”

Authority well knows that they cannot act beyond the statutory authority and they are doing all it takes to operate within the power they have.  They are focusing their minds very well to break through anonymity – very core point that is interesting about cryptocurrency.

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