With cryptocurrencies casting a larger shadow in the realm of regulation across nations, select policymakers are gearing up to combat undisclosed cryptocurrency usage. Their goal is to curtail transactions that fly beneath the radar of governmental oversight.
The most recent challenge to anonymous and pseudonymous crypto usage is emerging from Texas, where State Representative Phil Stephenson has put forth a proposal. draft bill If the proposed legislation passes through both Texan legislative chambers and receives the state governor’s approval, it would strictly require crypto users in Texas to reveal their identities.
Designated as H.B. No. 4371, this unprecedented proposal concerns 'digital currencies' and would compel all businesses within the state to verify the identities of their customers. paying via cryptocurrency .
Congratulations #Texas Texas is on the verge of being the first state to officially take a hard stance against undisclosed cryptocurrency activities. #cryptocurrency in the US. https://t.co/KHaPgQiq5H
— Drew Hinkes (@propelforward) March 10, 2019
Alternatively, businesses could opt out of identity verification if the customer utilizes a 'verified identity digital currency' (VIDC). A relevant section of the bill, Sec. 662.0002, states:
'Before accepting digital currency as payment, a person must confirm the identity of the payer. However, there's no need to confirm the identity if the payment comes through a verified identity digital currency [...] This state forbids the use of digital currencies that lack verified identities.'
So, what exactly is a Verified Identity Digital Currency?
According to Rep. Stephenson, a VIDC is a 'digital currency that makes it possible to know the true identities of both sender and receiver before anyone accesses another’s digital wallet.'
Drew Hinkes, a General Counsel at Athena Blockchain and an NYU academic, pointed out on Twitter the ambiguity surrounding what would currently qualify as VIDCs under H.B. 4371.
other questions: would any existing #cryptocurrency / #digitalcurrency He questioned not only which cryptocurrencies might fit the 'Verified identity digital currency' label but also what kind of ID verification would suffice. Should it be state-issued? Are the four state entities suitable to 'promote' such currencies?
— Drew Hinkes (@propelforward) March 10, 2019
During the same discussion, Peter Van Valkenburgh from Coin Center suggested the bill's drafting was peculiar and hinted at a lack of understanding ‘regarding the mechanics of digital currencies.’
Despite numerous constitutional uncertainties, the drafted bill is peculiar. 'Verifying true identities before accessing another's wallet' isn't congruent with digital currency operations.
— Peter Van Valkenburgh (@valkenburgh) March 10, 2019
It's still too early to gauge if H.B. 4371 will ultimately pass. Nonetheless, its introduction is significant as it's the first of its kind in the U.S. landscape. Only time will reveal if similar bills emerge across other states.
A French committee suggests banning coins that prioritize privacy.
In France, considerations for a privacy-targeted crackdown within the crypto sector have gained momentum recently, following a report by the Finance Committee of the National Assembly advocating a ban on fully anonymized cryptocurrencies.
'A ban on the spread and trading of [privacy coins enabling complete anonymity] would have been suitable,' declared the chair of the committee.
The report spotlighted privacy-focused cryptocurrencies like Zcash (ZEC), Monero (XMR), and PIVX as potential candidates for a ban.
Much like Texas’s H.B. 4371, it's uncertain whether France's committee recommendations will morph into policy in this European heavyweight.
It’s Not All Bad in the U.S.A.
Texas appears to be a peculiar case as many U.S. states are advancing pro-cryptocurrency laws, aiming to nurture, rather than curtail, the cryptoeconomy.
Notably, Wyoming has surfaced as a leader, passing over twelve crypto-positive legislations this year alone.
WHAT DO WYOMING'S BLOCKCHAIN LAWS SIGNIFY? Here’s my insight into how it all ties together. You might find the framework they’ve built truly astonishing! ???? #blockchain may want to see it. Once you see what #Wyoming Other states such as Utah, Colorado, Pennsylvania, and Arizona have embraced more supportive stances on cryptocurrencies lately. https://t.co/mQAwrOUcHE @Tyler_Lindholm @TraceMayer
— Caitlin Long ????⚡️???? (@CaitlinLong_) March 4, 2019
With no federal crypto regulations passed thus far, states have had to spearhead their own paths towards crypto regulation, with some adopting notably more liberal approaches than others.
William M. Peaster focuses on writing and editing about Ethereum, Dai, and Bitcoin within the cryptosphere. His work appears on platforms like Blockonomi, Binance Academy, and Bitsonline. He keeps a keen eye on smart contracts, DAOs, dApps, and the Lightning Network, all while learning Solidity! Reach him via Telegram at @wmpeaster
