Following some initial controversy with its announcement, Google has detailed the new rules for crypto wallet applications in its app store.
Crypto wallet companies, particularly those operating in regions such as the United States and the European Union, will need to obtain licenses from their respective domestic regulators and adhere to industry standards. This move aims to strengthen regulatory oversight within the Google Play ecosystem.
In the U.S., crypto wallet providers must be recognized by the Financial Crimes Enforcement Network (FinCEN) as money services businesses and gain authorization as money transmitters, unless they are federally- or state-chartered banks.
UK-based wallets require approval from the Financial Conduct Authority (FCA). Meanwhile, EU crypto wallets will need to register under the recently implemented Markets in Crypto-Assets (MiCA) framework.
Concerns Over Wallet Rules
The crypto community raised concerns that Google’s initial policy did not explicitly differentiate between custodial and non-custodial wallets. This prompted some providers of self-custodial wallets to question the necessity of licensing, citing current U.S. regulatory exemptions.
Google later clarified its stance, stating that non-custodial wallets are exempt from these requirements, with enforcement set for October.
The Compliance Tradeoff
A series of global regulatory efforts, such as the MiCA framework and the passage of the GENIUS Act in the U.S., have brought much-needed clarity to the crypto sector after years of uncertainty. While these measures are generally seen positively by the crypto community, they also increase compliance burdens for companies.
For example, registering with FinCEN as a money services business involves significant reporting requirements, including the development of an anti-money laundering plan, creation of Suspicious Activity Reports (SARs), and performing Know Your Customer (KYC) checks.
This new compliance landscape presents a challenge for many decentralized crypto firms that may now need to assess whether the benefits of inclusion in Google Play outweigh the added regulatory obligations.
