Texans may have to verify their identity to continue using digital assets if the proposed Texas House Bill 4371 legislation is approved. If approved, the bill proposed by Republican Phil Stephenson will come into force on September 1, 2019.
The bill requires users to submit identity verification to state authorities and further mandates the use of digital assets that facilitate identity verification. The bill states,
“Crypto assets that allow the true identities of the sender and the receiver to be known before a person has access to another person’s digital wallet.”
Stephenson’s bill, however, did not cite any specific digital asset which functioned as a ‘verified identity digital currency’. However, it did suggest that the Texas Department of Banking, Credit Union Commission, Texas Department of Public Safety, and State Securities Board will participate together to bolster the use of the same if the bill is passed.
The bill also suggested that these state agencies will provide residents with the necessary tools to help them identify between digital assets that qualify as a ‘verified’ and the ones that do not.
If the bill becomes a law, Texas would become the first state to outlaw anonymous digital currencies. However, the latest move has drawn significant flak from the crypto community as it contradicts the fundamentals of digital currencies that strive for ‘censorship resistance’.
A well-known crypto enthusiast and Adjunct Professor, Andrew Hinkes tweeted,
While others in the ecosystem called out the ‘poorly written draft’, the professor questioned the fundamentals of the lawmaker’s bill,
“would any existing #cryptocurrency /#digitalcurrency qualify as a “Verified identity digital currency” as defined? What level of “id” is required to be “verified”?State issued? Are 4 state administrative bodies the right entities to “promote” a digital currency?”
Texas authorities aren’t the only ones to initiate a bill directed against the anonymity of cryptocurrencies. Last week, the Finance Committee of the French National Assembly proposed a complete ban on digital assets which were privacy-focused to mitigate the chances of fraudulent activities like tax evasion, money laundering, fraud, or energy consumption.
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