Cryptocurrency License – The Basics
Getting a cryptocurrency license or registration as a money transfer service is mandatory in many countries around the world. While there are some countries that have banned the use or trading of crypto, others have taken a more accommodating stance by creating new rules to regulate these virtual currencies.
For example, bitcoin licensing and regulations have been put in place in various countries and businesses have to adapt their methods and practices to align with these new rules.
While most of the world is still trying to understand how this virtual money might impact financial services and transactions, many have begun a mad dash to implement some sort of regulation.
How the US Licenses Cryptocurrencies
If you are a cryptocurrency business in the US, you might be classified as a money transmitter and be required to get licenses.
With the sudden and meteoric rise of cryptocurrencies, the United States found itself playing catch-up to other prominent markets that were quicker to formulate regulation for the new form of payments.
The various regulatory bodies within the country have differing ideas about how to regulate virtual currencies. The CFTC, IRS, and FinCEN all have their own interpretation of digital currencies and how they should be supervised. This has led to the slow and complex regulation development.
Currently, the US regulates cryptocurrency like fiat money by defining them as money transmitters. For example, according to the Washington State Legislature, virtual currency businesses are included in the definition of a money transmitter company and therefore required to apply for a money transmitter license.
Constantly Evolving Landscape of Cryptocurrencies
The cryptocurrencies and virtual money currently in use have been increasing in number with various countries and even corporations jumping in with their own currency. For any new or existing cryptocurrency business, it is essential to remain ahead of the game and be updated in new regulations and cryptocurrency license requirements.