Texas will soon become the first U.S. State to enact a bill requiring digital assets. On April 21, the Texas House of Representatives backed the bill instructing cryptocurrency exchanges to retain sufficient reserves to fulfill their clients’ payment obligations.
The upcoming bill is yet to be approved by the Governor to enact it as a mandatory law. The bill has gone through three readings in the Senate, and now remarkable changes have been made.
The bill reads that cryptocurrency operating in Texas, with over 500 customers and $10 million in customer funds, must separate the reserve from the rest of the capital. The exchange will be barred from using users’ funds for any other use, excluding the payment requests of users.
The primary aim of implementing this bill is to ensure the security and safety of users’ funds and to avoid the fear of losing funds in the industry within the region. As per the notifications, crypto exchanges must submit their financial statement to the concerned regulators by the end of 2023.
Texas was among the best locations for crypto miners to operate at specific periods, but due to extreme weather conditions and energy, price activities reduced rapidly.
Many leading Crypto and Bitcoin miners were earlier headquartered in Texas, but regulatory action and hiking electricity prices have forced them to halt their operations.
In March 2023, Reuters reported that Bitcoin miners had consumed 2,100 megawatts of electricity purchased from the State Power supply board in the last few months. New York authorities have banned numerous cryptocurrency mining activities operated on fossil fuels.
Suddenly halting mining operations in Texas is quite common, and most miners stop all their operations during volatile climates requiring massive amounts of energy.
Most nations started to make amendments to the financial and crypto regulator after major disastrous events in the industry.
Earlier this, the unprecedented collapse of the third largest crypto exchange by trading volume, FTX, has stirred the market. Many miners experienced a lack of funding during the extended cryptocurrency market downturn. However, with the recent increase in Bitcoin prices, the industry is again expanding.
Additionally, data center companies now make up only 22% of the market, which is lower than previous years.
The entire industry struggled for the last few months, and many leading crypto-focused companies filed for bankruptcy. Following FTX and TerraUSD’s failure, numerous organizations battled with a capital crisis and massive layoffs.
Per data from CoinMarketCap, Bitcoin was trading at $26,899.29 with 24-hour trading volume of $9,971,911,693. In the last six-month trading session, BTC prices skyrocketed over 65%.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/05/20/proof-of-reserve-bill-needs-governors-approval-in-texas/