USA – TEXAS Trends and Developments Contributed by: Chris Davis, Joshua Smeltzer and Suhani Patel, Gray Reed
Digital Assets in Texas: a Comprehensive Overview of the Lone Star State’s Emerging Regulatory Landscape Texas has long prided itself on oil, cattle and wide- open spaces. Now, it is positioning itself at the fore- front of another frontier – one you cannot drill, rope or fence: digital assets. Like the wildcatters before them, bitcoin mining companies flocked to Texas because of its energy policies. Building on the pro-digital-asset history, Texas is now shaping a favourable business environment for finan- cial services companies offering traditional products, digital assets or both to consumers. In less than a year Texas bought bitcoin with public funds, adopted changes to the Uniform Commercial Code (UCC) to recognise digital assets, and used the passage of the GENIUS Act as a platform to create its own stablecoin law. This article examines the key pillars of Texas’s emerg- ing digital asset regulatory landscape: • the Texas Strategic Bitcoin Reserve; • the development of property rights through the UCC; • stablecoin legislation in the wake of the GENIUS Act; • the role of Texas banks and credit unions in adopt- ing and integrating these new assets; and • the overarching policy challenges that Texas must address as it positions itself at the forefront of this new frontier. Stablecoin Legislation and the GENIUS Act On 18 July 2025, the federal government passed the Guiding and Establishing National Innovation for US Stablecoins Act (the “GENIUS Act”). The GENIUS Act serves as the first comprehensive regulatory frame- work for stablecoins and provides an umbrella of fed- eral oversight that compels each state to determine how it will regulate its own stablecoin market, and – more broadly – integrate digital assets into its existing legal and financial infrastructure. For Texas, a longtime leader in energy, finance and innovation, the ques- tion is not whether – but how – to engage with digital assets. Proper implementation and careful considera- tion of sufficient, but not overly intrusive, regulation
is key. Fortunately, this approach fits perfectly with Texas’s regulatory mindset – as well as its culture. The GENIUS Act reshaped the stablecoin land- scape nationwide by transforming stablecoins from an unregulated digital asset to a controlled payment instrument. Notably, the Act defines “payment sta- blecoin” as a digital asset designed to be used as a means of payment or settlement, whose issuer is obligated to convert, redeem or repurchase it for a fixed amount of monetary value. As further detailed below, this will require financial institutions to navigate both federal and state oversight to take advantage of this new opportunity. The Act establishes a comprehensive regulatory structure. All issuers are required to maintain reserves backing outstanding stablecoins on at least a one- to-one basis, with reserves limited to high-quality liquid assets such as US currency, demand depos- its at insured depository institutions, and short-term Treasury bills. Additionally, the Act creates a two-tier regulatory structure: issuers with less than USD10 bil- lion in consolidated outstanding issuance may opt for state-level regulation, provided the state’s framework is deemed “substantially similar” to federal standards and issuers exceeding that threshold are subject to federal oversight, typically under the Office of the Comptroller of the Currency (OCC). For states, the GENIUS Act serves as both an oppor- tunity and a mandate. States who want to oversee sta- blecoin issuers must promulgate implementation rules by 18 July 2026. These rules must be approved by the Stablecoin Certification Review Committee: com- posed of representatives from the Treasury Depart- ment, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC). Specifically, the com- mittee will certify each state’s framework as “substan- tially similar” to federal standards. Additional guidance was provided through the Treasury Department’s 3 April 2026 Notice of Proposed Rulemaking, detail- ing how it will evaluate state frameworks, covering reserve composition, redemption guarantees, audit requirements and capital adequacy standards. The GENIUS Act further clarifies the role of depository institutions, including banks and credit unions, in the
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