New money transmitter licensing promises to roll 40 states into a single exam and license.
An organization of state regulators in the U.S. has announced a new streamlined process for money transmitter licensing that will save large operators — including firms — from getting separate licenses in every state.
The Sept. 15 announcement from the Conference of State Bank Supervisors (CSBS) has set out parameters for state licensing that will involve a single exam administered by examiners from across the country. Nationwide payments firms, meaning those operating as money transmitters in 40 or more states, will be able to get a single license to operate throughout the U.S.
There are currently 78 such firms in the U.S. A representative for CSBS confirmed to Cointelegraph that “Companies that are licensed in 40 or more states are automatically rolled in.”
Though the representative for CSBS was unable to name the companies involved, she specified that ‘It includes brick-and-mortar firms, it includes cryptocurrency firms.” A scan of the Nationwide Multistate Licensing System confirms that Coinbase, for example, is at registration in exactly 40 states and will be one of the notable beneficiaries of the new system.
The push to nationalize licensing for payments has attracted attention from many, including the Office of the Comptroller of the Currency. Acting head of the OCC Brian Brooks told Cointelegraph that “I congratulate CSBS and the states on recognizing what we have been saying for years that for national financial service businesses, it makes little sense to have a patchwork of regulation and supervision. While the efforts alleviate the inherent challenges facing a system based on 50 state laws and licensing regimes, only federal law and the uniform regulatory framework it provides fully addresses these issues.”
“That 40-state threshold is where this program is starting, not necessarily where it will stay in the future,” the CSBS representative said.
In response to the announcement, Head of New York’s Department of Financial Services Linda Lacewell tweeted that “States acting together can streamline oversight to reduce burdens on industry while protecting consumers and safety/soundness.”
The CSBS hopes that under the new system “regulators will gain more insight while also freeing up state resources.” The changes will take effect in 2021.
Updated: Sept. 15, 14:40 UTC