Money transmission licensing in Texas
Texas is a large market with a comparatively predictable regulator, which makes it a common early state in a multi-state programme. The Texas Department of Banking administers the Money Services Act, which licenses money transmission and currency exchange as separate activities, and Texas was among the first states to publish clear supervisory guidance on how virtual currency fits the transmission definition.
Texas requirements at a glance
Texas sets statutory floors that scale with the business. The state has adopted elements of the Money Transmission Modernization Act, which is gradually aligning its definitions and prudential tests with other adopting states.
Supervisory authority
Texas Department of Banking.
Legal basis
Texas Money Services Act, Finance Code Chapter 151.
- Licence types
- Money transmission licence and currency exchange licenceSeparate licences for separate activities; a business doing both applies for both.
- Filing route
- NMLSCompany and control person filings plus the Texas checklist.
- Minimum net worth
- Set by Finance Code 151.307A statutory floor that scales with the licensee's footprint and activity, subject to a ceiling. Request the current amount from the Department of Banking — it was not verifiable against a primary source when this page was written.
- Security
- Surety bond or approved equivalent, set by Finance Code 151.308Scales with transaction volume up to a statutory maximum. Request the current amount from the Department of Banking.
- Permissible investments
- Required at all timesEligible assets at least equal to outstanding transmission obligations.
- Control person review
- Fingerprinting and background checksDirectors, officers, and holders of 25% or more of voting shares; change of control requires prior approval.
- Audited financials
- RequiredWith the application and annually thereafter.
- Virtual currency
- Treated by reference to sovereigntyDepartment guidance distinguishes sovereign-backed digital currency from decentralised virtual currency in applying the transmission definition — confirm the current position before relying on it.
- Reporting
- Quarterly and annualNMLS Call Reports, annual renewal and audited financial statements.
Statutory minimums scale with locations, authorised delegates and volume, so figures quoted as flat Texas requirements describe only the smallest applicants. The amounts in Finance Code 151.307 and 151.308 could not be confirmed against a primary source when this page was written and are deliberately not stated here — request them from the Department of Banking.
What Texas licenses
The Money Services Act separates money transmission from currency exchange, and treats stored value and payment instruments within the transmission definition.
- Receiving money or monetary value for transmission, by any means, to a location inside or outside Texas.
- Selling or issuing stored value and payment instruments as part of the transmission definition.
- Currency exchange, licensed separately from transmission under the same Act.
- Serving Texas residents from outside the state, since the obligation follows the customer.
- Operating through authorised delegates, for whom the licensee remains responsible.
Texas guidance on virtual currency turns on whether the digital asset is backed by a sovereign issuer. The distinction is unusual and has practical consequences for exchange and custody models — check the current supervisory position rather than assuming national norms apply.
The Texas application process
Determine which licence or licences apply
1–2 weeksMoney transmission and currency exchange are separate licences in Texas. Businesses conducting both must apply for both rather than relying on one to cover the other.
Complete FinCEN registration and the AML programme
6–10 weeksThe federal filing and a working BSA/AML programme are expected as part of the package.
Filing: FinCEN Form 107
Prepare financials and calculate thresholds
6–10 weeksAudited financial statements, and net worth and security calculations based on projected locations, delegates and volume rather than launch-day figures. Obtain the current statutory amounts directly from the Department of Banking.
File through NMLS
2–4 weeksCompany form, control person filings, business plan, flow of funds documentation and the Texas requirements checklist.
Filing: NMLS MU1 and MU2 filings
Complete background checks and post security
4–8 weeksFingerprinting for control persons and a surety bond or approved equivalent in the amount the volume tier requires.
Respond to Department review
3–7 monthsThe Department reviews the funds flow, permissible investments policy and delegate arrangements. Texas is generally more predictable in its questioning than the larger coastal states.
Ongoing Texas obligations
Maintain eligible assets at least equal to outstanding transmission obligations at all times.
Maintain net worth and security at the level the current volume and delegate count require, adjusting as the business grows.
Federal obligations apply in parallel: written programme, CTRs above $10,000, SARs at $2,000 and above, travel rule records at $3,000 and above.
Written contracts, due diligence and monitoring for each delegate; the licensee answers for delegate conduct.
Quarterly NMLS Call Reports, annual renewal, audited financial statements and prompt notice of material changes.
Periodic examination by the Department, increasingly coordinated with other states through networked supervision.
Limits of a Texas licence
Texas is a good early state, but it is one state licence and nothing more.
- The licence covers Texas only; every other state requires its own application.
- A money transmission licence does not cover currency exchange, which is separately licensed under the same Act.
- It does not replace FinCEN MSB registration, which applies federally in parallel.
- It is not a banking licence and permits no deposit-taking or lending.
- Falling below the required net worth, security or permissible investments coverage is a supervisory event.
When Texas belongs in the first wave
Best for
- Businesses building a multi-state programme that want an early approval from a large market with a predictable regulator.
- Remittance operators serving corridors into Latin America with substantial Texas sending volume.
- Firms that can meet the entry thresholds with headroom for the scaling formula.
Not for
- Businesses that conduct currency exchange only and expect a transmission licence to cover it.
- Crypto models that have not checked how Texas applies the sovereign versus non-sovereign distinction to their asset.
- Applicants relying on the entry-level minimums while projecting volume that pushes them into higher tiers.
Related routes
The multi-state programme Texas sits inside.
The federal filing required alongside every state licence.
Another accessible large market, often paired with Texas in a first wave.
Businesses whose Texas activity is exchange rather than transmission.
Texas money transmission licensing — frequently asked questions
Finance Code 151.307 sets a floor that scales with the licensee's footprint, subject to a statutory ceiling, and it must be maintained continuously rather than met once at application. Texas has been implementing Money Transmission Modernization Act provisions, so the amounts move. Request the current figure from the Department of Banking rather than relying on a third-party page, including this one.
Typically four to nine months from a complete filing, which is faster than New York or California. Texas is generally regarded as one of the more predictable state regulators, which is why it often appears in the first wave of a multi-state programme.
Yes. The Money Services Act licenses money transmission and currency exchange separately. A business that does both applies for both — holding a transmission licence does not authorise currency exchange activity.
The Department of Banking has published supervisory guidance distinguishing digital currency backed by a sovereign issuer from decentralised virtual currency, and applies the money transmission definition differently depending on which is involved and on how the business holds or transfers the asset. The approach is unusual among states, so the current guidance should be checked directly rather than assumed to follow national practice.
Yes, if you provide money transmission to Texas residents. The obligation follows the customer, not the company's location. Out-of-state and foreign-owned businesses are routinely licensed in Texas.
Texas requirements are set by Finance Code Chapter 151 and Department of Banking rules, which are amended periodically as the Money Transmission Modernization Act is implemented. Figures are indicative for planning. Verify with the Department and Texas counsel.