Texas regulators suggest "sovereign-backed stablecoins" may fall under money transmission laws

The Texas Department of Banking released a supervisory memorandum on January 2, outlining the department's policy regarding cryptocurrencies and stablecoins. According to the memorandum, cryptocurrencies are not considered "money" under Texas' Money Services Act, because they do not involve the transmission of sovereign (government-backed) currency. As such they are not regulated under money transmission laws.

With regards to stablecoins however, "sovereign-backed stablecoin may be considered money or monetary value under the Money Services Act," and may be regulated under money transmission laws.  According to the memorandum, this is because the issuer of the stablecoin "has taken on the obligation to provide sovereign currency in exchange for the stablecoin at a later time." It remains unclear what crypto- and algorithm-backed stablecoins will be considered by the department.