AUSTIN, Texas—The Texas Department of Banking could consider “stablecoins,” a cryptocurrency designed to minimize the effects of price volatility, as money, making them and exchanges that deal with them subject to a number of Texas laws and license requirements, according to a new Supervisory Memorandum from the department.
Supervisory Memorandum 1037 examines the regulatory treatment of digital currencies under the Texas Money Services Act and addresses current trends in the field, including the introduction of stablecoins to the market, Cryptosumer reported, noting stablecoins are a kind of centralized cryptocurrency backed by the issuer with conventional currency, precious metals and sometimes algorithms.
The document reads that receiving a sovereign-backed stablecoin in exchange for “a promise” to make it available at a future date or different location may be recognized as a money transfer.
As such, a sovereign-backed stablecoin may be considered money or money value under the Money Services Act, Cryptosumer said.
The document further reads: “A licensing analysis will turn on whether the stablecoin provides the holder with a redemption right for sovereign currency thus creating a claim that can be converted into money or monetary value. This is true regardless whether the redemption right is expressly granted or implied by the issuer.”