Pennsylvania’s Department of Banking and Securities (DoBS) has declared that crypto exchanges and related crypto service providers are not required to apply for a money transmission license in order to conduct their business.
In a guidance document issued Wednesday (Jan 23), DoBS clarified that crypto was not considered as money, according to the Money Transmission Business Licensing Law or the Money Transmitter Act of Pennsylvania. Only fiat currency or US government-issued currency is.
As a result, all crypto trading platforms and related crypto businesses such as crypto ATMs are not whatsoever bound by the rules under these same two pieces of legislation. Hence, a license for money transmission is also not applicable.
“To date, no jurisdiction in the United States has designated virtual currency as legal tender,” DoBS noted.
Coindesk noted that the DoBS clarification on licensing has come after a delay of three years. Back then the state government had been seeking to update the definition of money to cover cryptocurrency businesses, but the process halted due to a budget impasse.
At the federal level, however, Coinbase also noted that firms handling Initial Coin Offerings (ICOs) are not necessarily exempt from being considered as “money transmitters”. The Financial Crimes Enforcement Network (FinCEN) said last year:
“An exchange that sells ICO coins or tokens, or exchanges them for other virtual currency, fiat currency, or other value that substitutes for currency, would typically also be a money transmitter.”