Texas lawmakers propose gold-backed state digital currency

Two Texas lawmakers, Senator Bryan Hughes and Representative Mark Dorazio, have introduced identical bills proposing the creation of a state-based digital currency backed by gold. Each unit of the proposed digital currency would represent a fractional equivalent amount of physical gold held in trust.

The bills, Senate Bill 2334 and House Bill 4903, outline the process for purchasing the proposed digital currency. Once a person purchases a certain amount of digital currency, the comptroller would use the money received to buy an equivalent amount of gold. The purchaser would then receive digital currency equal to the amount of gold purchased by the comptroller. The value of a unit of digital currency must be equal to the value of the appropriate fraction of a troy ounce of gold at the time of the transaction.

According to the bills, the trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold. The bills also state that a fee might be established “at any rate necessary” to cover the costs of administering this chapter.

While the bills have yet to be passed or presented for a vote, they are set to take effect on September 1, 2023. This move comes despite objections from several U.S. lawmakers who are against the introduction of a central bank digital currency (CBDC).

Florida Governor Ron DeSantis recently expressed concerns about CBDCs, stating that they would grant “more power” to the government and provide them “with a direct view of all consumer activities.” Similarly, Republican Senator Ted Cruz introduced a bill to block the Fed from launching a “direct-to-consumer” CBDC, arguing that it is “more important than ever” to ensure U.S. policy on digital currencies protects financial privacy, maintains the dollar’s dominance, and cultivates innovation.

The idea of a state-backed digital currency is not new, with countries such as China and Sweden already testing their own versions of CBDCs. However, the introduction of a gold-backed digital currency by a U.S. state is a unique move. It is unclear how the proposed digital currency would be regulated or how it would affect the current financial system in Texas.

Gold has historically been considered a safe-haven asset and a store of value during times of economic uncertainty. The proposed gold-backed digital currency could provide Texans with an alternative to traditional fiat currencies and may appeal to those who are skeptical of the government’s ability to manage the monetary system. However, it remains to be seen whether the proposed digital currency will gain widespread adoption and whether other states will follow Texas’ lead in introducing their own digital currencies backed by precious metals or other assets.


Tagged : / / / / /

Texas Objects to Binance.US and Voyager Digital Deal

The State Securities Board and Department of Banking of Texas have filed an objection to the proposed deal between Binance.US and crypto lender Voyager Digital, which filed for bankruptcy in the US in December 2021. The objection, filed on February 24, cites “inadequate” disclosures in Binance.US’s terms of service and restructuring plan, including the failure to inform unsecured creditors that they may only receive a recovery rate of 24-26% under the plan, compared to the 51% they would receive under Chapter 7.

Binance.US had disclosed its agreement to purchase Voyager Digital’s assets for $1.022 billion in December, a move that was expected to significantly expand its presence in the US crypto market. However, the objection by the Texas regulatory bodies could pose a major obstacle to the deal.

The objection raises concerns that the proposed transaction may not be in the best interest of Voyager Digital’s creditors, who may receive significantly less than they would under the Chapter 7 process. In addition, the objection points out that the disclosures provided by Binance.US may not be sufficient to enable creditors to make an informed decision about whether to support the proposed deal.

Binance.US has not yet commented on the objection, but the company is likely to face additional regulatory hurdles in the US as it seeks to expand its operations. The objection by the Texas regulatory bodies highlights the challenges that crypto firms may face in navigating the complex and evolving regulatory landscape in the US, where different states may have different rules and requirements.

Overall, the objection by the Texas State Securities Board and Department of Banking to the Binance.US and Voyager Digital deal underscores the importance of thorough disclosures and transparency in the crypto industry. As regulators continue to scrutinize the sector, it will be important for companies to provide clear and comprehensive information to all stakeholders in order to build trust and confidence in the market.


Tagged : / / / / /

El Salvador is Opening a Bitcoin Embassy in the United States

The nation of El Salvador is creating a “Bitcoin Embassy” in the United States, making it the first government in the world to do so. Bitcoin (BTC) is the most popular cryptocurrency in the world.

In 2021, El Salvador became the first nation in the world to recognize bitcoin as a form of legal cash. Now, the country is extending its Bitcoin strategy via a new cooperation with the government of Texas. The intergovernmental partnership intends to establish a Bitcoin Embassy, also known as El Salvador’s representative office, in Texas in order to collaborate on the development of new initiatives that seek to increase Bitcoin use.

Milena Mayorga, the Salvadoran Ambassador to the United States, broke the news in a message on Twitter on Feb. 14.

“During my meeting with the assistant secretary of the government of Texas, Joe Esparza, we discussed the opening of the second Bitcoin Embassy as well as the expansion of commercial and economic exchange projects,” Mayorga said. “We also discussed the expansion of commercial and economic exchange projects.”

The most recent Bitcoin project was launched only a few months after El Salvador established the world’s first Bitcoin Embassy in the city of Lugano, which is located in the southern region of Switzerland, in October 2022. As a part of these efforts, the two pro-crypto jurisdictions have begun working toward the establishment of a physical governmental presence in order to foster collaboration in education and research institutes relevant to Bitcoin.

Samson Mow, who formerly served as the chief strategy officer at Blockstream, believes that the phenomenon of Bitcoin embassies is the next phase in the process of countries and cities embracing Bitcoin. According to what he mentioned, such projects need collaboration across nations in order to launch new initiatives such as forming alliances amongst locations that have accepted Bitcoin.

The announcement comes at a time when it is being claimed that state legislators in Texas are exploring a new measure that would require “a master plan for the growth of the blockchain business.” The legislative initiative’s overarching goal is to make Texas the cryptocurrency capital of the United States by, among other things, making purchases using Bitcoin exempt from sales tax.

As was previously reported, Texas has emerged as one of the crypto-friendly states in the United States. This is due to the state’s passage of crypto-friendly legislation, which seek to better adapt commercial laws to the innovation brought about by blockchain and to digital asset regulations. Major mining businesses like Riot Blockchain, Core Scientific, and Genesis Digital Assets all have operations in the state of Texas. As a result, Texas is home to some of the most powerful Bitcoin miners in all of North America.


Tagged : / / / / / /

Riot Blockchain’s Texas Mining Operations Disrupted by Winter Storms

The cryptocurrency mining company Riot Platforms, previously known as Riot Blockchain, has announced that 17,040 rigs that were installed at its facilities in Texas have been rendered inoperable as a result of the “extreme winter weather” that has been experienced in Texas.

Riot said in a press release dated February 6 that two of the buildings of its Whinstone plant located in Rockdale, Texas were damaged in December as a result of the subzero conditions that the state endured for many days. From the 22nd through the 25th of December, temperatures plummeted below freezing in numerous areas of Texas as well as the rest of the United States.

According to Riot’s Chief Executive Officer Jason Les, “certain pieces of pipe in Buildings F and G were damaged during the severe winter storms that hit Texas in late December.” “It is likely that we will miss our previously declared aim of attaining 12.5 in total hash rate capacity in the first quarter of 2023 due to the harm that has been caused,” said the company.

According to Les, the damages caused an initial decrease in the facility’s hash rate capacity of 2.5 EH/s. However, when repairs were made, the business was able to return 0.6 EH/s to the facility. As of the 31st of January, the business Riot claimed creating 740 Bitcoin (BTC), which had a value of around $17 million at the time of publishing. Riot announced that there were 82,656 rigs operating with a hash rate capacity of 9.3 EH/s at that time.

Even though significant temperature reductions occurred in many regions of the United States in December due to increased travel over the holiday season, major towns in Texas such as Dallas and Austin were hit by a significant ice storm in early February. As a result of the weight of the accumulated ice, numerous tree branches and limbs collapsed, which caused damage to power lines, automobiles, and roadways, leaving thousands of inhabitants without access to electricity.

It is unknown if miners at Riot were impacted in a similar manner by the storm. Despite this, the firm did not disclose any reductions in operations as a result of the strain that the recent freeze placed on the electricity system in Texas.

Additionally, throughout the month of January, Riot reported selling 700 BTC for around $13.7 million. As of the 31st of January, the business had a total of 6,978 BTC. After the record-breaking heat wave that swept over the Lone Star State in July of 2017, the mining company reported selling coins.

During same month, Riot said that it intended to relocate a significant number of its mining rigs from a location in New York to one in Texas in an attempt to lower the company’s operational expenditures. Riot stock ended trading on the Nasdaq the same day it was released at $6.68, down 2.3%.


Tagged : / / / / /

Crypto Miners in Texas Halted Due to Extreme Heat

Many crypto miners have shut down operations due to a heatwave in Texas.

With temperatures well above 100 degrees Fahrenheit already in most areas, the Electric Reliability Commission of Texas (ERCOT) on Sunday urged  Texas residents and businesses to save electricity.

Crypto miners have stopped mining operations, fearing that the state’s electrical energy may not be able to meet electricity needs, such as turning on air conditioners for long periods of time.

Crypto miner Core Scientific tweeted a notice that to help people in Texas, all Core Scientific ASIC servers located in the state have been shut down and will remain closed until further notice.

ERCOT (Electrical Reliability Commission of Texas) is the organization responsible for operating the state’s electrical grid.

Many crypto miners in Texas have voluntarily cooperated to manage their power consumption as needed to ensure that the ERCOT grid is not under extreme stress. ERCOT requires a perfect balance between demand and supply to ensure the smooth operation of the grid.

Demands could hit a record 79,615 megawatts (MW), the group said. And ERCOT reported on Sunday that wind energy is “producing significantly less electricity than it has historically produced during the period” — less than 8% of capacity is expected to peak at demand.

Miners registered with ERCOT’s ancillary services are ready to shut down power at ERCOT’s direction due to the unusually high temperatures and the drop in wind power generation from the ERCOT system, available to all Texas consumers during periods of peak demand.

Many famous mining companies settle down in Texas so far. The London-listed Bitcoin mining company Argo Blockchain is one of the mining firms that officially launched its flagship mining facility Helios in Texas in May. In June, Riot Blockchain said it planned to ship the “remaining fleet of S19 miners” from New York to Texas,

Image source: Shutterstock


Tagged : / / / /

Argo Blockchain Announces 1st Quarter Financial Results

Argo Blockchain has released its financial report for the first quarter of 2022. It showed total quarterly revenue of $19.52 million, up from $17.84 million in the same period last year, attributed to an increase in hash rate over the past year.

The London-listed Bitcoin mining company said factors such as changes in the fair value of digital currencies for the three months ended March 31, 2022. The company’s net income for the first quarter of 2022 was $2.1 million, compared to $25.3 million a year ago.

Gross profit was $1.92 million compared to $27.13 million in the first quarter of 2021.

Argo Blockchain is a global data centre for business that provides a powerful and efficient platform for cryptocurrency mining operations.

As the London-listed Bitcoin mining company Argo Blockchain officially launched its flagship mining facility Helios in Texas this month, the Bitcoin mining hash rate is expected to jump from late last year’s 1.6 EH/s to 5.5 EH/s by the end of 2022.

Argo Blockchain said 470 bitcoins were produced in the quarter, an increase of about 21% from the 387 in the same quarter of 2021, with a mining profit margin of 76% and an average cost of $9,779 per bitcoin.

As of April 30, Argo owned about 2,700 bitcoins and bitcoin equivalents, all of which were mined by the company itself, the company said.

Argo has borrowed $70.6 million in recent weeks from a New York Digital Investment Group (NYDIG) subsidiary to expand its 200-megawatt Helios, Texas, infrastructure project, which is expected to rise to 800 megawatts.

CEO Peter Wall added: “To be a successful miner you need three components – power, miners, and capital. We already have a strong foundation for growth at Helios with our access to 800 MW of power capacity.”

Argo Blockchain had been building out the data centre in Texas, drawing on support through a short-term loan of $20 million it secured from Galaxy Digital back in June last year.

According to the company’s official website, they champion the use of renewable sources of power to support the growth and development of blockchain technologies.

Image source: Shutterstock


Tagged : / / / / /

Mining company Argo Blockchain to Launch Flagship Mining Facility in Texas

The London-listed Bitcoin mining company Argo Blockchain will officially launch its flagship mining facility Helios in Texas next week.

According to the company’s filings with the London Stock Exchange, The first phase of development of Helios will utilize 200 MW of power generation capacity, and Argo’s hash rate will increase by 243% and is expected to reach 5.5 EH/s by the end of 2022.

Per the filing, Helios also has up to 600 MW of additional generating capacity, enabling Argo’s operations to grow significantly to more than 20 EH/s.

Argo Blockchain has been making an emphatic move into the North American market in the past few years, citing the cheap and renewable energy sources available in various areas in the region.

Argo Blockchain has signed a partnership agreement with Core Scientific, and the two parties will exchange their respective bitcoin mining machines in the coming months.

The installation of the Bitmain S19J Pro mining rig has already started and will continue until July.

Argo Blockchain had been building out the data centre in Texas, drawing on support through a short-term loan of $20 million it secured from Galaxy Digital back in June last year.

Image source: Shutterstock


Tagged : / / / /

Texas City Fort Worth Becomes First Government to Mine Bitcoin in the US

The adoption of Bitcoin has become more significant at the city level in the United States. Fort Worth, a city in Texas State, announced Tuesday that it has become the first city to mine Bitcoin in the US. 

Webp.net-resizeimage - 2022-04-27T164053.104.jpg

The city, which is ranked the 12th largest and home to over 800,000 residents, said this initiative is a partnership with Texas Blockchain Council – a non-profit association made up of companies and individuals that work in Bitcoin, Bitcoin mining, crypto and blockchain industries.

In its statement, the city government said initially it will utilise three S9 Bitcoin mining machines, placing them in its city hall for the mining operations, which are donated by Texas Blockchain Council. The government added that these facilities will be protected by a private network to “minimise security risk.”

“With blockchain technology and cryptocurrency revolutionizing the financial landscape, we want to transform Fort Worth into a tech-friendly city,” said Fort Worth Mayor Mattie Parker.

Parker believes the city would be positioning itself to be the “capital of Bitcoin mining of Texas”. The administration aims at becoming a leading hub for technology and innovation, according to the statement.  

Yet, the process of Bitcoin mining is regarded as not environmental-friendly enough, as mining methods are usually based on Proof-of-Work (PoW), instead of Proof-of-Stake (PoS), and PoW is considered more energy-intensive, requiring more energy input which could be harmful to the environment. The government said, “the city estimates each will consume the same amount of energy as a household vacuum cleaner,” based on the number and type of machines being used, adding that the energy it uses for mining would be less: “the nominal amount of energy needed for the program is expected to be offset by the value of Bitcoin mined.” The programme would be evaluated after six months, according to the official information.

More enterprises are trying to put efforts into mining Bitcoin, for instance, U.S.-based energy operator ExxonMobil recently launched a pilot programme to conduct Bitcoin mining by converting excess energy through the production of natural gas.

Texas itself is also becoming a Bitcoin-friendly State. More crypto services have been applied domestically. Last June, Texas state-chartered banks got permission from the state regulator to provide customer custody virtual currencies services. 

Image source: Mattie Parker


Tagged : / / / / /

Ted Cruz buys the Bitcoin dip

Rafael ‘Ted’ Cruz, the junior Republican senator from Texas, is putting his money where his mouth is.

According to a financial disclosure filed on Friday 4th Feb, Cruz bought between $15k and $50k worth of Bitcoin (BTC) on January 25th, using the River brokerage.

At the time, Bitcoin was trading between $36k and $37k, and over the subsequent days it has risen to a current price of around $41,600. Assuming he hasn’t sold his bitcoins and incurred any short term capital gains taxes, his current profit on the transaction is in the region of  $2,000 – $6,850.

Source: United States Senate Financial Disclosures

Following the example of fellow Senator Cynthia Lummis of Wyoming, Cruz spent much of the latter half of the crypto bull run aligning himself with the blockchain and cryptocurrency industry, as his state benefited from an influx of Bitcoin mining companies and interest in the subject became more widespread.

He has advocated for the acceptance of cryptocurrency payments at gift shops and vending machines in the U.S. Capitol complex, and opposed a provision in the recent infrastructure bill that critics said would extend the definition of a ‘broker’ to miners, and potentially even validators and coders.

During the current cold spell engulfing the state of Texas, some crypto miners slowed or ceased operations to help protect the state’s energy grid infrastructure, which failed during a prolonged freeze in 2021. Cruz himself was notoriously absent for part of that time, as he was visiting the Mexican resort of Cancún.

River Financial is licensed in a number of U.S. states, but does not note a Texas Money Transmitter license on its website. According to the Texas Department of Banking guidance on Virtual Currencies, however, “no currency exchange license is required in Texas to conduct any type of transaction exchanging virtual with sovereign currencies.”

A number of Members of Congress, including Democrats Jake Auchinloss of Massachusetts and Marie Newman of Illinois, and Republicans Jeff Van Drew of New Jersey and Barry Moore of Alabama, have disclosed holdings in cryptocurrency or related stocks.


Tagged : / / /
Bitcoin (BTC) $ 42,197.31 2.05%
Ethereum (ETH) $ 2,215.62 0.04%
Litecoin (LTC) $ 71.95 0.36%
Bitcoin Cash (BCH) $ 241.03 2.25%