Google Play Store has introduced a new policy that mandates cryptocurrency wallet developers to secure official licenses for their financial services before publishing their apps. This policy specifically targets custodial wallets across 15 jurisdictions, including the United States and the European Union.
Google Play Store Licensing Rules Threaten Custodial Wallets in Key Markets
In a recent announcement, Google emphasized that the new Play Store policy is designed to ensure a safer and more compliant ecosystem for users. Developers operating in these regions must now adhere to licensing standards that exceed many current legal requirements for various wallet types.
For developers in the United States, the policy dictates registration with the Financial Crimes Enforcement Network (FinCEN) as a Money Services Business (MSB). Additionally, they must be registered with at least one state as a money transmitter or be a federal or state-chartered bank entity. This comes as a U.S. Senate draft bill suggests new market structure rules that could further impact licensing standards.
MSB registration involves strict compliance with Anti-Money Laundering (AML), Counter-Terrorist Financing (CTF), and Know Your Customer (KYC) procedures. While these requirements are standard for custodial financial institutions, they are not legally required for non-custodial wallets under FinCEN’s 2019 guidance. This guidance differentiates between hosted wallets that hold user funds and unhosted wallets that do not, but the Google Play Store policy imposes the same licensing requirement on custodial wallet apps.
Google’s EU Crypto Wallet Policy Could Reshape Global Access to Custodial Wallets
In the European Union, the policy requires developers to be authorized as a Crypto Asset Service Provider (CASP), as specified under the Markets in Crypto-Assets (MiCA) regulation. MiCA licensing applies to entities such as crypto exchanges, trading platforms, and custodial service providers, reflecting elements of the Financial Action Task Force’s (FATF) 2021 guidance on virtual assets and service providers.
This policy may mark a significant turning point in the regulation of cryptocurrency services. Should Google Play Store competitors adopt similar regulations, the distribution of custodial wallets might become limited to smaller app stores.
Paul Adedoyin is a seasoned crypto journalist with over four years of experience, delivering timely news, in-depth research, and insightful content to empower and inform his audience. His work has been featured on platforms such as CryptoMode and CryptoNewsFlash. Paul holds a degree in Geophysics from OAU, Nigeria. When he’s not writing, he enjoys watching soccer and reading educational journals. Reach him at [email protected]
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