Bill to Ban Anonymous Use of Crypto Introduced by Texan Lawmaker

Texan lawmaker Phil Stephenson (who also happens to be a certified public accountant) proposes “proper identification” for all state residents who wish to send or receive cryptocurrencies.

In a bid to check the anonymity offered by cryptocurrencies, Phil Stephenson, a Republican member of the Texas House of Representatives, has introduced a bill which proposes that all state residents are to verify their identities if they wish to use cryptocurrencies.

The House Bill (H.B.) No. 4371, which could make Texas the first American state to ban the anonymous usage of cryptocurrencies, will come into effect in September this year, if it becomes law. According to the bill:

“[Texas] 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.”

The bill states that anyone looking to accept digital currency payments must first verify the identity of the sender, but this verification process is not required if the payment is being sent by “a verified identity digital currency”.

H.B. No. 4371 also goes on to state that the public will be provided the tools they need to differentiate between anonymous and verified identity digital currencies.

Predictably, the bill drew a great deal of confusion and disapproval from cryptocurrency users and advocates:

https://twitter.com/mfkonn/status/1104928682047492096

https://twitter.com/propelforward/status/1104747993910181894

These developments come in the wake of a similar move undertaken by French authorities earlier this month. The Finance Committee within France’s National Assembly recently released a report which proposes a ban on cryptocurrencies that facilitate anonymous transactions, in order to curb illicit activities such as money laundering and various types of illegal funding.

Similar discussions took place earlier this year in the Netherlands, when finance minister Wopke Hoekstra moved to ban anonymous crypto by proposing a licensing system for crypto exchanges operating in the country, focusing heavily on know-your-customer (KYC) and anti-money laundering (AML) measures.

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