So a question that is often asked of us is can we start remittance-as-a-service and implement crypto or can we use crypto in the product offering?
So the answer is not too easy. If you want to know the tl;dr (too long, didn’t read), the answer is at the moment. It is difficult. It’s not a no, it’s just difficult.
So what is the right answer?
The right answer is that the people are the organizations that are sponsoring you for money transfer as a service are not too comfortable with crypto. The reason they are not too comfortable with crypto is that the banks that they work with that provide them access to banking, prohibit crypto. So if the banks find out that you were the money transfer operator or the MSB, the money services business is using crypto. They can de-risk them and provide them with maybe with reduced banking services or entirely deny them access to banking. And this is something that they don’t want, i.e. the money transfer businesses.
They don’t want to go into that business that would de-risk their banking relationship.
There are businesses that do allow crypto, but the flow of funds is not so easy. These solutions come with some restrictions, if you will, let’s call them elbowroom restrictions that you have to adhere to.
So if you have a project that involves crypto, and you say, well, you know what we will need a money services business that has the requisite money transmitter licenses in the United States, and they will process and then we will take custody of crypto and then from that crypto we would deliver it in Philippines or India or China or Nigeria wherever it is.
That’s not possible.
Because you are violating so many federal and state laws that no one would want to offer you sponsorship because of this.
We have done a video on custody of crypto, you may want to watch that. But at this point in time, if you would like to have crypto in your solution do remember, it is not a cheap solution. And it is something that requires a very restricted framework that has to adhere to the Financial Action Task Force or FATF travel rule and other guidelines placed out by both the state and federal regulators when it comes to crypto.
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This page was last updated on November 14, 2022.