In line with with a recent reported ‘published‘ by Supervisory Memorandum, the Texas Department of Banking might consider stablecoins as money, accepting them and exchanges that deal with them subjected to several Texas laws and license needs.
Supervisory Memorandum – 1037, that was published by the monetary watchdog examines the regulative treatment of digital currencies beneath the Texas Money Services Act and addresses current trends within the field, together with the introduction of stablecoins to the market. Stablecoins are a form of centralized cryptocurrency backed by the issuers with standard currency, precious metals or sometimes algorithms.
The Act reads that receiving a sovereign-backed stablecoin in exchange for “a promise” to make it available within the future date or several locations could also be recognized as a money transfer. As such, a sovereign -backed stablecoin could also be thought of money or money worth beneath the Money Services Act. Explaining further, the document adds:
“A licensing analysis might turn on whether or not the stablecoin provides the holder with a redemption right for sovereign currency therefore making a claim that could be reborn into money or monetary worth. This can be true regardless whether or not the redemption right is expressly granted or used by the issuer.”
As for the position of cryptocurrencies in Texas typically, the document specifies that “cryptocurrency isn’t money beneath the Money Services Act,” therefore receiving it on constant conditions as stablecoins isn’t thought of a money transmission.
“However, once a cryptocurrency dealings will embrace sovereign currency, it might be money transmission looking on how the sovereign currency is handled. A licensing analysis is expected to be based on the handling of the sovereign currency,” it’s further added.
As ‘reported‘ earlier, major U.S. cryptocurrency exchange Coinbase halted business within the state of Wyoming once its operations were deemed to fall into money transmission license restrictions. The license had been suspended as of mid-2014 due to the stipulations in state law that needed all exchanges to “double reserve” the digital assets of state residents with standard currency.
However in March 2018, Wyoming state law-makers passed House Bill-19 concerning the exemption of virtual currencies from the Wyoming Money Transmitter Act. This allowed Coinbase to apply for a license below which it will resume operations as a compliant and controlled exchange.