I found a similar thread in this forum: http://www.oxwall.org/forum/topic/11486, but it never mentioned how to get the system to send html emails by default. I have located the language key and modified it with the desired HTML content.

I have searched the entire admin dashboard and cannot find any setting to now utilize the modified language key: id: 1012 | keyId: 2556  (Automated: Signup Email Confirmation: HTML)

Hopefully its a check box or a setting I missed, would definitely appreciate it if any knows how this can be done.