Texas turns its regulatory eye towards stablecoins: First of many?

04 Jan, 2019
by Arthur Sillers
Regulation
Texas turns its regulatory eye towards stablecoins: First of many?

A new memo from Texas indicates that regulators might require stablecoins to be licensed, unlike other types of cryptocurrency issuers in the state.


According to Coindesk, a memo published Wednesday reiterated the stance that selling cryptocurrencies of most varieties does not count as 'currency exchange,' and so crypto startups in Texas avoid certain licensing restrictions, but suggested that stablecoins, because they represent an 'obligation to provide sovereign currency in exchange for the stablecoin at a later time,' may effectively count as money itself.

Read more: Paxos Standard giving trouble to users trying to redeem stablecoins for dollars

While Texas has been among the most permissive states in the US, this memo indicates that, at least in regard to stablecoins in particular, they might come around to doing some enforcing. This is likely not the first government to turn their regulatory eye towards this digital asset, as Forbes recently suggested that once they have figured out what to do about ICOs, the SEC might begin focusing on stablecoins next. Still, most commentors are confident that stablecoins have a solid future ahead of them.

Bitcoin.com hosted four experts to weigh in on stablecoins, and they generally agreed that stablecoins represent a 'revolutionary' link between pure cryptocurrencies and fiat currency. While Tether in particular has been embattled for alleged misrepresentation of funds (to put the theories lightly), in general the crypto community is bullish on stablecoins, and regulators take a liking to them relative to most cryptocurrency.
Read more: New report casts doubts on Tether's $1.8 Billion in back up funds 
Miko Matsumura of Evercoin did acknowledge criticism that they were 'unimaginative' and Roger Ver reiterated frustration about their popularity because they are inherently reliant on fiat currency, which many get into crypto precisely to get away from. The experts took a pretty optimistic version of the criticism, though they were inherently acknowledging the fact that stablecoins are fundamentally just digitized IOU statements. Still, the general takeaway was that stablecoins are an effective 'bridge' technology, allowing users to enter into and out of the crypto space more easily.
Even if other regulators follow Texas' lead- it doesn't look like stablecoins are going anywhere soon.

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Read more about: Tether (USDT)

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