Exploring the Possibility of Adding Litecoin to the Texas Government's Balance Sheet

The Texas Blockchain Group has released a comprehensive 84-page report on how the state can support the growth of the blockchain industry. The report includes input from representatives from state agencies, Texas universities, and private companies. The report includes six recommendations for the state to consider, three of which could directly benefit Litecoin.

The first recommendation calls for a two-year tax holiday for retail sales made using direct cryptocurrency point-of-sale payments, subject to a reasonable value cap. The second recommendation suggests that the state should consider adding cryptocurrencies with a large market cap as an authorized investment for the state. The third recommendation suggests that the state should make it clear that operating a Lightning Network node does not make a business or individual a money services business in Texas. Litecoin is one of top most used cryptocurrencies for payments in the world, it has been consistently in the top 10 market cap for the past 11 years, and it also has the Lightning Network. It is highly likely that Litecoin would meet and be applicable with these recommendations

The report also includes recommendations for creating a statutory definition of a fully U.S. dollar-backed audited stablecoin, alerting consumers to the risks associated with different cryptocurrency lending models, and opposing attempts to create a retail Central Bank Digital Currency in the United States.

Here are the (6) recommendations in the report.

1. Institute a two-year retail sales “tax holiday” for payments made using direct cryptocurrency point-of-sale payments for products and services, subject to a reasonable value cap.

2. The legislature should consider codifying established cryptocurrency with a large market cap, such as bitcoin, as an authorized investment for the State.

3. Texas should take necessary steps to make clear to the public that operating a Lightning Network node does not make a business or individual a money services business in Texas by either a Texas regulator public statement or by enacting legislation.

4. Texas should create a statutory definition of a fully U.S. dollar-backed audited stablecoin that has the status of “money” for all purposes, including, but not limited to, for permissible investments, under the Texas Money Services Act.

5. The Legislature should consider alerting and informing consumers to the risks associated with the different risk profiles related to different cryptocurrency lending models. The Texas state legislature should coordinate with the Texas Congressional Delegation to ensure that regulation at the federal level similarly differentiates between the risk profiles of these different business models.

6. The Work Group calls attention to the potential dangers of the creation of a retail Central Bank Digital Currency (“CBDC”)—e.g., a CBDC that involves a direct relationship between the Federal Reserve and consumers—in the United States, and encourages the Legislature to coordinate with the Texas Congressional Delegation to oppose such attempts.

Overall, the report offers a comprehensive approach to supporting the growth of the blockchain industry in Texas, with specific recommendations that could benefit Litecoin and others. The state legislature is encouraged to consider the recommendations in the report and take action to support the growth of the blockchain industry in the state.

Sources:

1. https://portal.bcwg.texas.gov/General-Documents/Texas-Work-Group-on-Blockchain-Matters-Report/wbtp-2m5k

2. https://portal.bcwg.texas.gov/download/wbtp-2m5k/application%2Fpdf

3. https://capitol.texas.gov/tlodocs/87R/billtext/pdf/HB01576I.pdf