Licensing · Digital assets
Texas crypto and stablecoin licensing rules
Texas regulates virtual currency activity mainly through its money transmission law, not through a separate crypto license. The answer turns on the asset and on what the business does with its customers' money. This guide explains the Texas framework neutrally, so a founder can ask the regulator precise questions.
Not legal advice. This page describes the law and published guidance; it takes no position on any asset or business. Regulatory positions on digital assets change often. Statute text checked September 2026; read the Department of Banking's current guidance before relying on anything here.
The three sources to read
| Source | What it does |
|---|---|
| Texas Finance Code Chapter 152, the Money Services Modernization Act | Defines money transmission and "money or monetary value", and requires a license |
| Texas Department of Banking Supervisory Memorandum 1037 | Explains how the Department applies the Act to virtual currency; first issued in 2014 and revised since, most recently in January 2025 according to published legal commentary |
| Texas Finance Code Chapter 160, Digital Asset Service Providers | Adds customer-fund and reporting duties for certain licensed platforms that hold customers' digital assets |
The Department publishes the memorandum and related material on its virtual currency guidance page at dob.texas.gov.
Why the asset matters
Money transmission under Chapter 152 involves receiving money or monetary value for transmission, or selling or issuing payment instruments or stored value. Section 152.003 defines money or monetary value as currency, or a claim that can be converted into currency through a financial institution, electronic payments network or other payment system. The definition then expressly includes a stablecoin that:
- is pegged to a sovereign currency;
- is fully backed by assets held in reserve; and
- gives a holder the right to redeem the stablecoin for sovereign currency from the issuer.
A stablecoin meeting that test is treated like money under the Act. Legal commentary on the January 2025 memorandum reports the Department's view that transactions involving stablecoins get closer scrutiny as possible money transmission than transactions involving other virtual currencies, and that non-stablecoin virtual currency such as bitcoin is not itself "money or monetary value", because no one is obliged to redeem it for sovereign currency.
Why the activity matters
Even when the asset is not money, the business may still handle money. A platform that takes U.S. dollars from a customer and holds or sends them is receiving money, whatever it later buys with it. The questions to work through for each flow:
- Does the company ever receive sovereign currency, or a qualifying stablecoin, from a customer in Texas?
- Does it hold that value for later use, or send it to someone else, rather than completing an exchange with the customer immediately?
- Does it issue anything that behaves like stored value?
- Is a licensed or exempt party, such as a bank, the one that actually receives and transmits the money? (See Texas money transmission exemptions.)
Currency exchange is licensed separately under Chapter 152, but its definition covers exchanging one government's currency for another's, which is a narrower question.
Chapter 160: platforms that hold customer assets
Chapter 160, added in 2023 by House Bill 1666, applies to a digital asset service provider, meaning an electronic platform that facilitates trading of digital assets for customers and keeps custody of those assets, if it holds a Texas money transmission license and either serves more than 500 digital asset customers in Texas or has at least $10 million in customer funds. Banks are excluded. Such a provider:
- may not commingle customer funds with its own operating capital, proprietary accounts or other property;
- may not use customer funds to secure or back a transaction for anyone other than the customer who provided them;
- must keep customer funds so that customers can fully withdraw them;
- must have a plan that lets each customer see, at least quarterly, what is owed to them and what is held, and lets an auditor see a pseudonymized version at any time; and
- must file an annual report within 90 days of fiscal year-end, including an attestation of customer liabilities, evidence of customer assets and an auditor's attestation by an independent CPA.
Chapter 160's text still refers to the former Chapter 151, which the Money Services Modernization Act replaced. Ask the Department how it applies the chapter today.
The federal layer
Federal rules take their own view. FinCEN's guidance, including its 2019 guidance on convertible virtual currency, treats many exchangers and administrators of convertible virtual currency as money transmitters, which means registration and an anti-money-laundering program. See FinCEN MSB registration and building a BSA/AML program. Sanctions rules apply to digital asset transactions as they do to any other. Securities and commodities law questions are separate from money transmission and are not covered here.
A working process
- Classify each asset the product touches against the Section 152.003 stablecoin test.
- Draw each flow of funds, including fiat on-ramps and off-ramps, custody and transfers between users.
- Read the current memorandum and compare its examples with your flows.
- Check Chapter 160 if you will hold customer assets and could cross its thresholds.
- Run the federal analysis separately.
- Ask precise questions. The Department can say how it views a described activity, and the commissioner can exempt some persons on application.
Common questions
Does Texas require a license to operate a crypto exchange?
There is no separate Texas crypto license. Whether an exchange needs a money transmission license depends on whether it receives money or monetary value for transmission, including qualifying stablecoins and any sovereign currency it handles. Read the Department's current guidance.
Is a stablecoin money under Texas law?
Under Section 152.003, a stablecoin that is pegged to a sovereign currency, fully reserve-backed and redeemable from the issuer for sovereign currency is included in "money or monetary value".
Does Texas require proof of reserves?
Chapter 160 requires covered digital asset service providers to file annual reports that include evidence of customer assets and an independent auditor's attestation. It does not use the phrase "proof of reserves".
Is a non-custodial wallet provider a money transmitter?
Software that never receives or controls customer value is in a different position from a custodian, and Chapter 152 excludes providing solely online services or network access. Confirm how the Department views your specific design.
For the license itself, see Texas money transmitter licensing.
Last reviewed 2026-09-17