A Republican member of the Texas House of Representatives, Phil Stephenson, has introduced a bill requiring Texas residents to identify themselves if they wish to use cryptocurrencies. H.B. No. 4371 details that individuals who send and receive digital currencies must not be allowed anonymity.
Mr Stephenson is a certified public accountant and appears to have very little understanding of how crypto works. The Bill proposes that a person receiving crypto as payment must first “verify the identity of the person sending payment”. However, it also states that verification is not required “if the payment is sent by a verified identity digital currency.”
But what exactly is this “verified identity digital currency”? The bill says it is “a digital currency that allows the true identities of the sender and the receiver to be known before a person has access to another person’s digital wallet”. But, it does not list examples of what constitutes a verified identity digital currency
A digital currency is a form of currency that is available only in digital or electronic form, and not in physical form.
Bill Is “Oddly Drafted”
The Texan lawmaker has said that his qualifications can help the state with its finances, but the free-market nonprofit Texans For Fiscal Responsibility only gave him a 40 percent favourable rating, which is very low for a Republican.
The proposal has not gone down well within the crypto community. Andrew Hinks, General Counsel at Athena Blockchain, tweeted “Congratulations Texas, you’re the first state to formally attack and attempt to ban anonymous use of cryptocurrency in the US”.
Peter Van Valkenburgh, board member of the ZCash Foundation, tweeted: “Several looming constitutional concerns aside, this is very oddly drafted. ‘True identities verified before a person has access to another person’s digital wallet’ that’s not even how digital currencies work”.
The bill says that the agencies mentioned will provide the public with the tools they need to determine the difference between a verified identity digital currency, and one that provides anonymity. But with crypto experts saying the bill is badly written and makes no sense, how are the general public expected to understand it?