Stablecoin Issuers May Need Licenses at Texas, Unlike Most Crypto Startups
If a stablecoin issuer or exchange really occupies a holder fiat currency may be determined by analysis, however.
This is “since the issuer has taken over the obligation to present sovereign money in exchange for the stablecoin in a later time,” Cooper writes.
The record specifically summarizes Texas banking coverage on various kinds of crypto trades, including crypto-to-crypto exchanges and crypto-to-fiat exchanges. The document also summarizes how straight transferring cryptocurrencies from one party to another does not qualify as cash transmission.
“In contrast, as a sovereign-backed stablecoin may be contemplated cash or monetary value beneath 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 transfers. ”
Nevertheless, in the revised version Cooper adds that stablecoins may fall under existing definitions of “money” or “monetary price,” and therefore anyone who purchases the stablecoin includes a claim to the autonomous currency assets underlying the royalties that they possess.
A memo published Wednesday from Texas Banking Commissioner Charles Cooper summarizes how cryptocurrencies are to be treated under local and national regulations, specifically adding details of how stablecoins backed by autonomous, or fiat, currencies may be evaluated.
It further adds:
Fiat currencies image via Shutterstock
The guidance builds up on a previous memo released by the country in 2014, which explained how cryptocurrency companies with operations in Texas should take care of the nascent asset class.
Caution to comply
As in the preceding edition, Cooper notes that cryptocurrencies aren’t treated as cash under Texas law, also trading cryptocurrencies for fiat does not count as “foreign . ” As such, startups don’t have to get currency exchange licenses to run trades — making the Lone Star State among the nation’s most permissive.
Cooper finishes his memo from warning trades as well as other startups that they need to comply with applicable laws, particularly if they conduct money transmission.