Texas may be left deprived of crypto anonymity

A Republican member of the Texas House of Representatives, Phil Stephenson, has introduced a bill that could deprive the state of crypto anonymity. 

The bill conveyed that according to the clauses, individuals of the state would require to identify themselves if they wish to use cryptocurrencies. In other words, details of individuals who send and receive digital currencies must be known. As an exception, if the user happens to use a ‘verified identity digital currency’ then they are exempt from submitting verification to the state.

The bill clarified the definition of verified identity digital currency. To qualify, a digital coin must allow the true identities of the sender and the receiver to be known before a person has access to another’s digital wallet.

Texas could be the first state in the US to ban the anonymous use of cryptocurrencies. Phil who is a staunch Texas Republican and certified public accountant (CPA), wants to mandate residents in the state to verify their identities. If the bill becomes law it will take effect on September 1, 2019.

The bill further cited –

“this state may not use a digital currency that is not a verified identity digital currency — The Texas Department of Banking, Credit Union Commission, Texas Department of Public Safety, and State Securities Board shall collaborate to encourage the use of verified identity digital currencies.”

Phil’s bill notes that the involved agencies will provide the public with the tools so that they can determine the difference between a verified identity digital currency and one that provides anonymity. Phil’s bill can help the state with financial situations.

Introducing identity into crypto transactions has its share of pros and cons. An ideal trade-off has to be worked out.

Cryptocurrency advocates were confused and agitated to hear that a bill attempting to ban anonymous digital currency use was submitted.  Andrew Hinkes, co-founder and general counsel of Athena Blockchain, tweeted rather sarcastically congratulating Texas on its attempt to formally attack the privilege to transact cryptocurrencies staying unknown.

Andrew continued by asking questions that were raised because it seemed open-ended. Do any existing digital currencies come under the bracket of ‘verified identity digital currency’? What is the level of identification required to be labeled as ‘verified’? Are state administrative bodies the right entities to ‘promote’ a digital currency?

This development is rather disheartening considering that a large number of cryptocurrency fans would be dejected to hear about the bill. There was general leniency in Texas with regards to digital currencies and overall personal freedom. If the bill becomes a law, it could potentially affect business operations and add a wide variety of other adversities for citizens who believe in privacy.