Texas turns its regulatory eye towards stablecoins as the digital asset may qualify as “money” under Texas law, according to a Supervisory Memorandum published on Jan 2, 2019.

A memo published Wednesday by Texas Banking Commissioner Charles Cooper reiterated the stance that stablecoins may effectively count as money itself because they represent an ‘obligation to provide sovereign currency in exchange for the stablecoin at a later time.’

The guidance builds upon a previous memo released by the state in 2014, which described how cryptocurrency companies with operations in Texas should treat the nascent asset class. As in the previous version, Cooper notes that selling cryptocurrencies of most varieties does not count as ‘currency exchange,’ and so crypto startups in Texas avoid certain licensing restrictions.

Warning to Comply

The document warns exchanges and other startups that they must comply with relevant laws, particularly if they conduct money transmission. It specifically outlines:

“In contrast, because a sovereign-backed stablecoin may be considered money or monetary value under the money services act, receiving it in exchange for a promise to make it available at a later time or different location may be money transmission.”

Whether a stablecoin issuer or exchange actually owes a holder fiat currency may be dependent on analysis, however.