On Jan. 28, the Texas Department of Banking released a revised version of its Supervisory Memorandum 1037, providing clarification on the regulatory treatment of virtual currencies under the Texas Money Services Modernization Act, or the MSMA, which became effective on Sept. 1, 2023.
The memorandum, which supersedes a previous 2019 memorandum, provides clarity with respect to the classification of both stablecoins and nonstablecoin virtual currencies under the MSMA. Specifically, the memorandum makes clear that transactions involving stablecoins will generally be scrutinized more closely as potential money transmission than transactions involving nonstablecoin virtual currencies, such as bitcoin and ether.
A "virtual currency" is broadly defined under the MSMA as, "an electronic medium of exchange typically used to purchase goods and services from certain merchants or to exchange for other currencies, either virtual or sovereign," according to the memorandum.
