Google Play Makes Controversial Decision on Cryptocurrencies

The Google Play Store has announced a new policy for cryptocurrency wallet developers. Developers wishing to publish wallet apps in 15 regions, including the United States and the European Union, will be required to obtain official licenses in those countries.

In the US, developers are required to register as a Money Service Business (MSB) with FinCEN and hold a state money transmitter license or operate as a federal/state bank. MSB registration carries stringent compliance requirements, including AML (Anti-Money Laundering), CTF (Counter-Terrorist Financing), and KYC (Know Your Customer). This goes beyond the legal requirements for non-custodial wallets, which are not considered money transmission services under current legislation.

In the EU, developers are required to hold a Crypto Asset Service Provider (CASP) license under the MiCA (Markets in Crypto-Assets) regulation. MiCA licenses are typically granted to exchanges, trading platforms, and digital asset custodians. This makes it virtually impossible to obtain a license for a simple non-custodial software wallet.

The new policy doesn't distinguish between custodial and non-custodial wallets. Experts say this could force most non-custodial wallet developers out of the Google Play Store, restrict open-source software innovation, and impose AML/KYC requirements on all non-custodial wallets built into Android devices.

Google states that this step aims to “provide a safe and compatible ecosystem for users.”