The Pennsylvania Department of Banking and Securities (DoBS) released a report on Wednesday clarifying that Cryptocurrency exchanges and ATMs will not be considered as money transmission services.
DoBS mentions that after receiving a lot of requests from businesses to clarify its stance on Crypto related businesses the department decided to provide guidance on the applicability of the Money Transmission Act (MTA) or Money Transmission Business Licensing Law of Pennsylvania. Companies need to obtain MTA in order to transmit money (fiat currency) “on behalf of an individual to a 3rd party,” and charge a fee for it.
The department clearly specifies that Cryptocurrency exchanges do not come under the MTA as they are not Money transmitters. The DoBS said:
“There is no transferring money from a user to another user or 3rd party, and the Platform is not engaged in the business of providing payment services or money transfer services.”
Similar laws even apply for Cryptocurrency ATMs, Kiosks and Vending Machines. DoBS mentions:
“In both the one-way and two-way Kiosk systems, there is no transfer of money to any third party. The user of the Kiosk merely exchanges fiat currency for virtual currency and vice versa, and there is no money transmission. Thus, the entities operating the Kiosks would not be money transmitters under the MTA.”
Under the MTA money is defined as “currency or legal tender or any other product that is generally recognized
as a medium of exchange.” and Pennsylvania defines money as “[l]awful money of the United States” and “[a] medium of exchange currently authorized or adopted by a domestic or foreign government.”.
Thus DoBS concludes that only fiat currency is considered as money as no jurisdiction in the United States has declared Virtual Currencies as legal tender.
In contrast to Pennsylvania, two new bills were introduced in the State of Wyoming which gives Cryptocurrencies the same status as money. The bill classified Digital assets into 3 categories: digital assets, digital securities, and Virtual currencies.
Blockmanity previously reported: “Wyoming rules money as private property under the Uniform Commercial Code (UCC) Article 9, virtual currencies like Bitcoin would also be given similar rights where owners will be able to transfer Bitcoin without the need of any intermediary.”
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