In the US state of Texas, a new proposed bill sets out to require identity verification to use cryptocurrencies. The bill is called House Bill 4371 and was proposed by Phil Stephenson, a Texas Representative on March 11, 2019.
According to the bill’s documentation, the bill mandates that the person receiving a cryptocurrency payment must first verify the identity of the person sending the payment. However, the bill does state that if the cryptocurrency being sent is from a verified identity digital currency, verification is not required.
The bill identifies a verified identity digital currency as:
“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.”
Adding to this, the bill states:
“This state may not use a digital currency that is not a verified identity digital currency.”
Will Privacy Coins Be Banned in Texas?
The bill does not specifically name or give examples of which digital currencies will be banned under this bill and which ones are considered verified identity digital currencies. However, it’s safe to assume that cryptocurrencies with high levels of anonymity such as Monero (XMR) and Grin (GRIN) will be banned.
As for cryptocurrencies with high privacy features which can be toggled on or off, like Dash (DASH) and ZCash (ZEC), maybe they have a chance of being allowed under this new anti-anonymity Texas bill.
This anti-anonymity bill could have detrimental effects on the crypto industry if it’s passed and adopted by other states and nations, as even highly popular coins like Litecoin (LTC) and Ethereum (ETH) are exploring protocols to enhance their privacy features.
Texas Encourages the Use of Verified Identity Digital Currencies
Along with the banning of private crypto transactions in Texas, the bill plans to conduct an awareness initiative headed by the Texas Department of Banking, Credit Union Commission, Texas Department of Public Safety, and State Securities Board to encourage the use of verified identity digital currencies.
These entities plan to educate law enforcement and the general public about digital currencies and provide them with tools to identify which cryptocurrencies are acceptable and which ones are not. The initiative will also be used to promote the use of verified identity digital currencies.
If this bill is passed, it’s likely that the state of Texas will also ban cryptocurrency tumblers and mixing services that mask the identity of those transacting trackable crypto like Bitcoin (BTC).
These mixing and tumbler services mix the transaction trails with those of other users on the blockchain, making it very difficult to find the origin of the transaction on the blockchain.