Google Play Store recently implemented new licensing requirements for cryptocurrency wallet applications in various jurisdictions, including the US and the EU. This move comes as part of efforts to ensure a safe and compliant ecosystem for users, with developers now being required to obtain regulatory approvals before publishing their apps on the platform.
The policy applies to both custodial and non-custodial wallets, imposing compliance burdens that many developers may struggle to meet. In the US, for example, developers must register with FinCEN as a Money Services Business (MSB) and obtain state money transmitter licenses, or operate as federally or state-chartered banking entities. This process involves strict adherence to Anti-Money Laundering, Counter Terrorist Financing, and Know Your Customer frameworks.
However, industry experts have criticized Google’s requirements, noting that they exceed current legal obligations for non-custodial wallets. FinCEN’s 2019 guidance on Convertible Virtual Currencies distinguishes between “hosted” custodial and “unhosted” non-custodial wallets, with non-custodial wallets not qualifying as money transmitters under existing regulations.
Consensys lawyer Bill Hughes raised concerns about the lack of clarity in Google’s policy, particularly regarding the definition of “software wallet” terminology. He highlighted that registering as an MSB is not a requirement for non-custodial wallets according to FinCEN regulations. This has led to confusion and frustration among developers who may now face significant barriers to entry on the Play Store.
Furthermore, Justin Slaughter, vice president of regulatory affairs at Paradigm, criticized the policy as particularly problematic given Google’s ongoing antitrust litigation. He emphasized that requiring federal licenses for pure coding activities could hinder innovation and disrupt the cryptocurrency industry’s growth.
In conclusion, Google’s new licensing requirements for cryptocurrency wallet applications have sparked controversy within the industry. Developers are now facing increased regulatory hurdles that could impact their ability to offer non-custodial wallet services on the Play Store. As the debate continues, it remains to be seen how these policies will shape the future of cryptocurrency app distribution on major platforms.