“Blockchain is a booming industry that Texas needs to be involved in.” – Gov. Greg Abbott
Over the past week, Texas has undergone significant developments in opening the Texas market to crypto business and banking. As a result of the efforts by Governor Abbott, virtual currencies are classified under the Texas Uniform Commercial Code as a secured transaction:
“Over the weekend I signed a law that puts virtual currency under the Texas Uniform Commercial Code to be a secured transaction. It defines virtual currency, establishes when a person acquires a right in it, and when a person has control of it,” - Governor Abbott on LinkedIn.
This development follows an industry notice released on Thursday, June 10, by the Texas Department of Banking. Texas state-chartered banks are now authorized to provide custody services for crypto: “This notice affirms that Texas state-chartered banks may provide customers with virtual currency custody services, so long as the bank has adequate protocols in place to effectively manage the risks and comply with applicable law.”
The notice defines cryptocurrency or “virtual currency” as "an electronic representation of value intended to be used as a medium of exchange, unit of account, or store of value. Virtual currencies do not exist in a physical form. Instead, they are intangible and exist only on the blockchain or distributed ledger associated with that virtual currency. The owner of the virtual currency holds cryptographic keys associated with the specific unit of virtual currency in a digital wallet. The keys enable the rightful owner of the virtual currency to access and utilize it further.”
This set of decisions by Governor Abbott and the Texas Department of Banking puts Texas, the world's 9th largest economy, on a path to be a leader in the innovation of digital markets and assets.
These developments could not have come at a better time for the “Lone Star State,” as bitcoin is now recognized as legal tender in El Salvador. Texas is the second state in the U.S. to open for crypto business after Wyoming.
If you have any questions regarding the provision of virtual currency custody services, contact Marcus Adams, Assistant General Counsel of the Texas Department of Banking, via email or by phone at (512) 475-1236.
To better understand what this means for Texas, check out this article: “How Wyoming became the promised land for bitcoin investors.”