Google Play Store to Publish Only Licensed Crypto Exchanges and Wallets
Highlights
- Google Play Store to restrict crypto wallet apps to licensed providers.
- New rules impact custodial wallets in 15 jurisdictions globally.
- EU MiCA licensing blocks most custodial wallet developers from compliance.
Google Play Store has announced a different policy which makes it compulsory for cryptocurrency wallets to acquire official licenses for their financial services. This is a requirement that needs to be satisfied by the developers before they can publish their apps.
The update affects custodial wallets only. It applies to 15 jurisdictions, including the United States and the European Union.
Google Play Store Licensing Rules Threaten Custodial Wallets in Key Markets
According to a Google announcement, the measure by its Play Store aims to create a safer, compliant ecosystem for users. Developers in these regions must now meet specific licensing standards that go far beyond existing legal requirements for many wallet types.
In the United States, the Google play store rule states that developers must register with the Financial Crimes Enforcement Network as a Money Services Business (MSB). They must also be registered with at least one state as a money transmitter. Alternatively, they must be a federal or state-chartered bank entity. A recent U.S. Senate draft bill outlines proposed market structure rules that could further influence licensing standards.
MSB registration requires adherence to strict Anti-Money Laundering, Counter-Terrorist Financing, and Know Your Customer procedures. These obligations, while standard for custodial financial institutions, are not required by law for non-custodial wallets under FinCEN’s 2019 guidance.
That guidance distinguishes hosted wallets (which hold user funds) and unhosted wallets, which do not. 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 Google play store policy demands that developers be authorized as a Crypto Asset Service Provider (CASP). This authorization falls under the Markets in Crypto-Assets (MiCA) regulation.
MiCA licensing applies to entities such as crypto exchanges, trading platforms, and custodial service providers. The approach reflects elements of the Financial Action Task Force’s (FATF) 2021 guidance on virtual assets and service providers.
The policy may be a pivotal point in the regulation of cryptocurrency services. If Google play store competitors set comparable regulations, the distribution of custodial wallets could be restricted to smaller app stores.
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