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Legislation that would require exchanges to maintain reserves “sufficient to meet all obligations to customers” has brought it one step closer to reality in the state of Texas. The bill passed the vote in the Senate and now only awaits the signature of the state governor.
On May 15, State Bill 1666, amending the Texas Financial Code, passed the Senate after it was passed by the State House of Representatives earlier this year. After three readings in the Senate, the text of the bill has not undergone significant changes compared to the previous draft.
Under the amendments, digital asset providers that serve more than 500 in-state clients and have at least $10 million in client funds will be prohibited from pooling client funds with any other type of operating capital and using client funds for any further transactions other than the initial transaction at the request of the client. .
Related: Bitcoin supporters rally at Texas State Capitol to oppose cuts to mining stimulus
In addition, exchanges must maintain sufficient reserves to accommodate all potential withdrawals at any given moment. Within 90 days after the end of each financial year, companies must submit a report to the State Banking Department on their existing obligations to customers.
If the provider fails to comply, the State Banking Department will have the right to revoke its license.
Texas has become an area of active lawmakers when it comes to cryptocurrencies. In addition to the Proof of Reserve bill, in April the Senate voted for a bill to cut some of the incentives for cryptocurrency mining. At the same time, Texas legislators voted to amend the state’s Bill of Rights and add a provision recognizing the right of individuals to own, hold, and use digital currencies.
