(TNS) — The high-profile FTX collapse may have poisoned crypto trading platforms, but it won’t slow proponents’ plans to make Texas a leader in a still-growing industry .
The Texas Work Group on Blockchain Matters recently released a master plan to establish the state as a leader in an industry valued at approximately $5 billion worldwide.
The Lone Star State currently ranks as the 4th best state for crypto enthusiasts, according to the 2022 Smart Asset Survey, which takes into account many factors, including crypto-friendly legislation. Texas trails Nevada, Florida and California.
“Texas can differentiate itself by remaining a leader in cryptocurrency-related legislation to attract companies deterred by regulatory uncertainty,” the report states.
Created by the Texas Legislature in 2021, the Blockchain Working Group has 16 members, including representatives from state agencies, universities, and private companies. The group has met monthly this year and drafted an 84-page report containing 21 recommendations.
The group worked on four areas related to blockchain technology. These are: economic growth opportunities, the state of Texas industry, workforce and academic needs, and legislative recommendations. Blockchain technology is the backbone of the digital world, creating a record of cryptocurrency transactions maintained between linked computers.
Christopher Calicott, one of the group members and managing partner of Austin-based Trammell Venture Partners, said Texas needs to be ready to benefit when cryptocurrencies go mainstream. rice field. According to a Precedence Research forecast, the global blockchain technology market size is expected to surpass $1.6 trillion by 2030.
“Crypto has not had the moment of mass consumer adoption that has happened to Starbucks customers using QR codes in drive-thru, but I think it is imminent,” he said.
A master plan to expand the blockchain industry in Texas includes sections on education, energy, finance and government.
Recommendations include creating incentives to attract businesses that are not profiting from data monetization. This goes back to an industry that values privacy. States should “embrace the tradition of individual liberty” by “making clear that the U.S. Constitution’s protections against unjustified search and seizure extend to activities on the Internet,” the report said. rice field.
The group also proposed that miners who voluntarily agreed to reduce their electricity usage when the state’s grid was overwhelmed would not have to pay taxes on their electricity bills.
“This will be a small cost to taxpayers and a big benefit to grid reliability,” the report said.
According to the report, these miners help stabilize the grid by “absorbing stranded energy.” The more miners that need to be connected to the grid, the more willing Texas is to invest in power-producing assets that benefit the state as a whole.
During the week of July 11th, when temperatures in North Texas topped 100 degrees, 15 bitcoin miners cut back on their power usage, cutting off 1,000 megawatts of power for several hours. This corresponds to approximately 1.5% of the load on the grid during peak demand.
Group recommendations are a starting point. From here, state legislators consider the ideas they want to move to the ballot.
Do Crypto Players Need More Incentives?
Not all Texans think cryptocurrency companies need to be treated better.
Self-proclaimed environmentalist Jackie Sawicky is protesting Castle Rock, Colorado-based Riot Blockchain’s plans to build North America’s largest bitcoin mining facility in Rockdale. Cryptocurrency mining is “deliberately designed to waste as much energy as possible,” she says, something the state doesn’t need when it has to ask residents to use less. said.
“Most people aren’t into cryptocurrencies at all, but companies are getting very special treatment while we are on the brink,” she said.
Electricity prices in Texas soared by more than 70% this summer. Crypto miners use about 3,000 megawatts of energy per day, which is about 4% of peak demand on the hottest day, said Lee Bratcher, president of the Texas Blockchain Council. says. There are at least 27 mining operations in the state, according to the council, but there’s no way to know for sure the total number.
Sawicky pointed out that Riot Blockchain has already been paid to shut down operations when the state’s grid is overloaded. Riot said shutting down during peak demand earned him about $9.5 million in credits in a month this summer. As part of a voluntary power reduction program, cryptocurrency miners can power down their facilities and return unused power to the grid at a premium rate.
Riot also received incentive packages from local development authorities. The company was offered his 45% discount on local taxes for the next ten years. Tax cuts and sales tax credits have allowed Riot Blockchain to hire a large team, said Chad Harris, chief commercial officer at Riot Blockchain.
Rockdale City Manager Barbara Holly told the Texas Work Group on Rockdale Blockchain Issues that the city of Rockdale has earned $1 million in sales tax revenue for the first time since Riot came to town. said to be expected to exceed
But Sawicky argues that the downsides far outweigh the upsides.
“It’s all a pyramid. This is a decentralized scam, a complete bubble. And a lot of them don’t have plans for rainy days, so when the economy crashes and people want their money back.” , they say, “Oops, we’ve spent money.” “Bitcoin has no future.”
Sawicky hinted at FTX’s recent bankruptcy amid an $8 billion shortfall.
Blucher said the group, influenced by FTX, is working on legislation that would help prevent a similar collapse of the Texas company. The bill would require exchanges to submit evidence of their reserves to the Texas Department of Banking and disclose them to auditors. This is to prevent commingling of client funds with company funds and is done by FTX.
“I think we can lead the country with this,” Bracher said.
The industry’s failures come from companies with inferior business models, Carricott said. They acquire customer assets on the platform and use them for the company’s business objectives.
He said there are many crypto companies that offer better consumer protection.
“FTX takes a financially conservative approach that contrasts with how some companies in Texas are actually approaching Bitcoin,” he said. “We feel the blow from a regulatory perspective is detrimental to Texas companies doing it right.”
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