Bitcoin transactions are gaining in popularity across the country, but especially in Texas. While the state does not recognize this virtual currency as legal tender, it does allow the use of it in exchange for goods and services provided. As a result, you’re seeing more Bitcoin-related services and many small businesses allowing its use as a viable form of payment.
Bitcoin has value because parties in each transaction of the blockchain agree that it does. But what about interstate commerce? How does Texas govern such instances?
Texas and Bitcoin Transactions
As the American Bar Association notes, “a merchant that accepts bitcoin or other virtual currencies for its own account in order to facilitate the sale of goods and services will not need (our emphasis) to be licensed by or register with any governmental entity.”
That does not mean it’s the Wild West, however.
If a merchant takes place in the provision of Bitcoin-related services — like, say, money transmission, or holding payment for a good or service from one of two parties to send to the other — then they could need to register with the Texas Department of Banking as a money transmitter.
While that may seem relatively lax from a regulation perspective, don’t expect the lack of scrutiny to continue. The department already is cracking down on companies that blur the lines between simple transactions and Bitcoin-related services.
As the use and acceptance of Bitcoin and other cryptocurrencies changes, expect a greater body of law to rise up around it. Therefore, if you plan on accepting crypto into your business functions, it behooves you to stay up-to-date on any new legal maneuvers or events surrounding it.
But the simple answer to our question: no, Bitcoin transactions do not need to be based in the state of Texas to be considered “legal.”
Is Bitcoin Really Worth It?
What you should be asking of yourself at this point is this question. Bitcoin and its cryptocurrency brethren are extremely volatile, and there’s no sign of when the volatility will end. Before deciding to get involved with it, you must first determine whether it fits the needs of your business and that you’ll be operating within the realms of legality.
John Teakell has many years of experience on both sides of financial law. He’s even held a high-level counsel position with the United States Securities and Exchange Commission. If you have any questions related to this aspect of currency and business, consult with him today. His decades of knowledge and eagerness to help can help you make the best decision for your company.