Texas Republican Wants to Ban Anonymous Crypto Transactions
A member of the Texas House of Representative has recently introduced a bill to ban the anonymous use of cryptocurrencies in the state, requiring anyone sending or receiving cryptocurrencies to go through “proper identification of individuals.” Although the community’s reaction to this bill was expectedly bad, some even claim that parts of the bill make no sense.
Filed by the Republican member of the house Phil Stephenson on March 8th under bill number 4371, it goes on to say that, “[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.” However, according to the author of the bill, if the user already uses a “verified identity digital currency” (VDIC), where the identity if sender is known prior to the transaction, they do not have to submit verification with the state.
If passed, the bill would come into effect starting September 1st, 2019.
Meanwhile, crypto industry players offered their view on the issue.
“While Wyoming and Colorado try to adapt to the inevitable, Texas is trying to stop the sun from rising in the east,” tweeted Dave Hendricks, CEO and founder of Vertalo, a provider of digital asset management solutions.
Cryptocurrency lawyer Peter Van Valkenburgh added that “Several looming constitutional concerns aside, this is very oddly drafted. ‘True identities verified before a person has access to another person's digital wallet’ that's not even how digital currencies work.”
Putting an undefined identity requirement on individual recipients of payments is maybe ok constitutionally (but makes little sense). Person wants to pay you, you ask: are you you? Person: yes. Boom payment can happen.— Peter Van Valkenburgh (@valkenburgh) March 10, 2019
“The point is, some legislator in [Texas] wants to treat crypto more strictly than cash,” replied Andrew "Drew" Hinkes, co-founder and the General Counsel of investment firm Athena Blockchain.
Others are speculating what the motivation behind this bill could be. “I think this legislation is specifically targeting merchants who accept bitcoin. I bet you my whole next paycheck there are credit card companies close to this legislation and they will be the ones lining up to offer crypto ID registration and verification services,” writes Twitter user @heavilyarmedc. User @instabeel puts things into perspective: “First let’s focus on cleaning up our incredibly corrupt [government]. THEN we can focus on tracking who is buying curtains and candy bars with bitcoin.”