The state of Texas has brought forth legislation that, if signed by the governor, could have a significant impact on digital asset providers operating within the state. The bill, known as state bill 1666, recently passed the Senate vote and is now one step closer to becoming law. This legislation would require exchanges to maintain reserves “in an amount sufficient to fulfill all obligations to customers.”
The bill has undergone three readings in the Senate, with the text remaining largely unchanged from its initial draft. Under these proposed amendments, digital asset providers serving more than 500 customers in Texas and holding at least $10 million of customer funds would be subject to specific restrictions on the use of those funds. Providers would be prohibited from comingling customer funds with any other type of operational capital or using customer funds for transactions other than those explicitly requested by the customer.
In addition, exchanges would be obligated to maintain reserves sufficient to accommodate all potential withdrawals at any given time. Furthermore, within 90 days following each fiscal year’s conclusion, companies must submit a report to the State Banking Department detailing their liability to customers. The state’s Banking Department will have the authority to revoke a provider’s license should they fail to comply with these requirements.
Supporters of the bill argue that such regulations are necessary to ensure adequate consumer protection in the rapidly growing world of digital assets. Detractors, however, say that the bill could potentially stifle innovation and impose restrictions on exchanges, leading to additional costs for both companies and their customers.
Texas has been proactive in its approach to crypto legislation, with lawmakers recently voting to amend the state’s Bill of Rights by adding a provision recognizing individuals’ rights to possess, retain, and utilize digital currencies. Furthermore, the Senate voted in favor of cutting crypto mining incentives in April, demonstrating the state’s commitment to establishing a robust regulatory framework in the sector.
While some view these developments as positive steps toward a more secure and stable cryptocurrency landscape, others express concerns that overly restrictive regulations could hinder the growth of this evolving industry. As the debate around the appropriate level of regulation continues, the cryptocurrency world will be keeping a watchful eye on the developments in Texas and beyond.
Source: Cointelegraph
