Pennsylvania Clears Crypto Exchanges from Money Transmitter Licensing Requirements

Pennsylvania’s Crypto Framework

In a bold move, Pennsylvania has announced that cryptocurrency exchanges are not classified as money transmitters under the Money Transmitter Act (MTA). This surprising revelation comes from a newly published document by the Department of Banking and Securities (DoBS) on January 23, shedding light on the regulatory landscape for digital currencies in the state.

Understanding the Money Transmitter Act

The MTA, often dubbed the Money Transmission Business Licensing Law, traditionally requires entities that transmit money for a fee to obtain a license. But here’s the kicker: according to the DoBS, cryptocurrency transactions do not fit neatly into this definition.

What Constitutes Money?

The definition of “money” in this context is crucial. The DoBS clarifies that digital currencies like Bitcoin (BTC) are not considered money under the MTA. Instead, money is defined as “currency or legal tender or any other product that is generally recognized as a medium of exchange.” So, while you can buy a pizza with BTC, Pennsylvania won’t recognize it as “money.”

Crypto Kiosks and ATMs: No Money Transmission Here

Another important takeaway is the stance on crypto kiosks and ATMs. Whether these machines allow for one-way withdrawals or two-way exchanges doesn’t change the ruling. No money transmission is involved, as these machines don’t send money to a third party. So, if you thought you were engaging in some form of money transmission while using those shiny crypto ATMs, think again!

The Bigger Picture Across the U.S.

This guidance comes at a time when various jurisdictions are testing the waters of cryptocurrency regulation. Just last week in Congress, a bill was introduced that would exempt non-custodial crypto service providers from certain state laws. Meanwhile, Wyoming has taken the lead, passing legislation that exempts specific blockchain tokens from certain regulations. It’s a wild west out there in crypto-land, but Pennsylvania is planting its flag firmly on the side of innovation.

Conclusion: A Progressive Step?

By clarifying that crypto exchanges do not fall under the MTA, Pennsylvania is sending a positive message to the digital currency world. It opens the doors for wider adoption and innovation in the state while reassuring crypto enthusiasts that their transactions can’t be boxed in by outdated regulations.