The plans of politicians in two states are unlikely to become law. But they show how far US politics has opened up to cryptocurrencies.
It was to be expected that a US state would want to become the next El Salvador by also making Bitcoin legal tender. So to the official means of payment. If some Republican politicians have their way, this should happen in two states sooner rather than later.
In Arizona, for example, Senator Wendy Rogers has presented a bill that would make Bitcoin legal tender. The design is impressively clear and simple. He defines what is legal tender in the State of Arizona:
So far, these are 1. any means of payment authorized by the Constitution or Congress, 2. bills issued by the US government, and 3. any banknote recognized as legal tender by a competent court. Rogers’ draft adds a succinct point: “4. Bitcoin.” That’s it.
Wendy Rogers is one of America’s most controversial politicians. She reportedly has ties to the far-right militia Oath Keppers and has reportedly celebrated QAnon’s conspiracy theory machine. The New York-based ADL, an organization against discrimination, recently named Rogers the most extreme politician in the USA, which, given the openness of US politics to extremes and muddleheads, should be a respectable achievement by Republicans. Rogers then thanked the “losers” of the ADL for the award.
However, it is not very likely that the draft will be accepted. The US Constitution does not allow states to create their own legal tender. The extent to which this also prohibits the states from making existing means of payment legal is probably a question for constitutional lawyers.
However, Wendy Rogers is not the only one with such plans. In the next but one east state, Texas, Republican Don Huffines went public with similar, even more far-reaching, projects. Huffines plans to compete for governor against fellow party member Greg Abbott.
Huffins writes that he has owned Bitcoins for years and is strongly convinced of Bitcoin’s value as an asset and potential as a currency. According to Huffins, Texas should lead the way in shaping Bitcoin policy and the adoption of cryptocurrencies. “I am committed to making Texas the citadel for Bitcoin and protecting the industry from the federal government.”
Yes, he really said citadel . It’s obvious, Huffins said, that the government is trying to prevent freedom-loving Texans from investing in bitcoin, “and without a dedicated governor standing in their way, they will.” Making Texas the Bitcoin citadel also means making Bitcoin legal tender.
However, the enthusiasm for Bitcoin is not a very strong unique selling point for Huffins. The incumbent Texas governor, Republican Greg Abbott, is also welcoming the crypto industry with open arms .
Texas has become a mining hotspot under him in recent years. One reason for this is Abbott’s open policy. The laws and regulations enacted under him make it easy for businesses to hold cryptocurrencies and also use them as collateral for loans.
Since the miners fled China, Texas has been establishing itself as a mining superpower. This also has consequences for the power supply. Allegedly, Abbott negotiated directly with the industry, asking miners to help survive the winter without blackouts by shutting down their machines during times of congestion. Experiences from countries like Iran or Kazakhstan show that such cooperation can be necessary to prevent excessive mining from bringing power grids to the brink of collapse.
This close cooperation between the government and miners, for example through the Texas Blockchain Council, also opens the government to unusual approaches. According to the Council, Abbott sees the advantages of the “healthy dynamics” of mining, which brings in taxpayers’ money, creates jobs and also strengthens the power grid. This thesis was discussed in detail in a research paper by Square : Mining creates a constant demand for electricity that can be easily switched on and off, thus creating incentives to expand the electricity grid and renewable energy capacities.
This perspective on mining seems to be slowly reaching politics as well. At least in Texas.