The Texas legislature passed a bill this week that requires cryptocurrency exchanges to provide "proof of reserves," the latest move from the Lone Star State.
HB-1666Co-sponsored by Republican State Rep. Giovanni Capriglione and Sen. Tan Parker, it applies to digital asset service providers that serve more than 500 customers or have $10 million in customer funds, and requires them to hold reserves at a "set amount sufficient to meet all obligations to digital asset customers.โ
The bill also prohibits the commingling of customer funds and requires those providers to submit a report to the state with an auditor's certification along with other filings.
โThis bill increases transparency by requiring proof of reserve certifications from digital asset service providers โ think exchanges โ while continuing a light-touch regulatory stance and business-friendly environment that Texas has cultivated for many decades,โ said Lee Bratcher, president of Texas Blockchain. City Hall, on May 17 in a video on Twitter.
The bill is not enough to prevent fraud in the digital asset industry, but it is a useful tool for the Texas government, Bratcher added.
Texas is a busy bee
Texas legislators voted unanimously last week to change the state's bill of rights to include the right of its residents to own, hold, and use digital currency.
โThe right of individuals to possess, own and use a mutually agreed medium of exchange, including cash, coins, bullion, digital currency or privately issued scrip, shall not be infringed when trading in and contracting for goods and services.โ says the bill. "No government shall prohibit or tax the ownership or possession of any form or amount of money or other currency."
Texas senators too approved a bill that would, in part, remove tax incentives for virtual currency miners, but has yet to be addressed in the House.
