- Virtual currencies are specifically addressed under the Texas UCC amendment bill.
- HB 4474 has a significant flaw that Long uncovered.
House Bill 4474 was introduced on March 12, 2021, by Texas Representative Tan Parker to better adapt commercial law to blockchain innovation and the regulation of digital assets.
Virtual currencies are specifically addressed under the Texas UCC amendment bill. According to Lee Bratcher, the organisation’s president, this bill was drafted with the help of the Texas Blockchain Council; a trade association recently formed to help Texas become the nation’s blockchain leader. Noting that if passed, the definitions of digital currencies and control in business law would be altered.
Few Unsolved Issues
According to Bratcher, there are many similarities between the Digital Asset Law passed in Wyoming on February 26, 2019, and HB 4474’s approach. Although significant, there are still a few unsolved issues. When it comes to HB 4474, Caitlin Long—chief operating officer and founder of Avanti Financial Group—says that it is similar to Wyoming’s law in one respect: It is trying to define virtual currencies.
If HB 4474 passes, Texas will join Wyoming as the only U.S. state with specific legislation addressing this critical issue, according to Long. HB 4474, on the other hand, has a significant flaw that Long uncovered. As Long points out, the law does not explain how a lender might get an enforceable lien on virtual money.
For Long, the uncertainty surrounding the enforceability of liens on Bitcoin (BTC) means that the digital currency’s owners risk being “mired in a lien mess in the U.S”. A recent increase in lending guaranteed by Bitcoin as collateral has made this even more alarming for Long, as she said.