Could your state make cryptocurrency legal tender in the near future? In this segment of "The Crypto Show" on Motley Fool Live, recorded on Feb. 2, Fool contributors Jon Quast, Travis Hoium, and Chris MacDonald discuss some recent news that Arizona and Texas could become bigger players in the cryptocurrency space.
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Jon Quast: We have also some news [laughs] out of Arizona and Texas. Now, this was actually surprising me as I got this news ready for today's show. Current Texas Governor Greg Abbott is actually very pro-Bitcoin (BTC -0.10%) mining, trying to attract Bitcoin miners to the states with promise of cheap energy.
There are energy issues in Texas that they are working through. He's asking Bitcoin miners, it looks like if there's another crisis, go ahead and pull your stuff offline first so that we can make sure powers running to the more essential things first. That's interesting, but also Abbott is currently trailing in the governor race, the primaries to Alan West. He's running on a platform saying Texas will lead the world, I got Zoom in the way here, leveraging Bitcoin along with enabling development of novel blockchain technology.
It seems like both Abbott and West are open to making Bitcoin legal tender in the state of Texas. Now, that is insane to think that a state would make it legal tender, like El Salvador, which is a country. It's one thing to have a country, it's another thing to have part of the country make it legal tender, but this isn't unprecedented with Texas because Arizona state senator Wendy Rogers has introduced a bill last week to the Arizona legislative assembly that making Bitcoin legal tender there in Arizona. This is fascinating.
Travis Hoium: Again, this is I think states trying to find ways to differentiate themselves. You've seen Miami try to become the center of cryptocurrency to the development space and that's where a lot of the companies that are building in the crypto world have moved to or started. Now, it looks like Arizona and Texas are trying to wiggle their way into that ecosystem as well.
Chris MacDonald: I think that differentiation point is a really good one to make. I know about a month ago, there was some interesting news that Elizabeth Warren and some other regulators were looking at, requesting information from crypto-miners, specifically on energy consumption, how it might impact the energy grid, and looking at potential regulations given what's going on in the geopolitical space around the world. That's something that it seems like a lot of regions or politicians from different regions are looking at.
Right now, it's interesting because maybe politicians are looking at this as a vote thing, what does the populace want? Do they want regulation to ensure a stable power supply or are they more interested in the mining aspect and how that could help the economy and what's the bigger reward or what's the risk-reward look like?
From a political and regulatory standpoint, this is really interesting news. Then the legal tender piece, that probably I think would go along the lines of differentiation as well in terms of seeing how it goes and being a test area in some areas are willing to do that. It seems like Arizona has been one of those areas.