Google Cracks Down on Crypto Apps with Strict Licensing Requirements in US and EU

Google has introduced a new policy for the Google Play Store requiring all cryptocurrency wallet and exchange applications to demonstrate proper licensing in key jurisdictions, including the United States and the European Union [1]. Under this update, developers must hold official authorizations such as FinCEN registration or banking status in the U.S., and be recognized as a Crypto-Asset Service Provider (CASP) under the Markets in Crypto-Assets (MiCA) regulatory framework in the EU [2]. Apps that fail to meet these criteria will be either rejected during submission or removed from the platform.

The policy primarily targets non-custodial crypto wallets and exchanges, mandating compliance with the regulatory standards of the major markets where they operate [3]. This shift is seen as part of Google’s broader effort to align with global regulatory trends and mitigate risks such as money laundering and fraudulent activity. The move follows similar steps taken by Apple and reflects an increasing emphasis on compliance within the cryptocurrency sector.

Industry observers have noted that while the policy may enhance trust and security for users, it could pose significant challenges for smaller developers and startups, who may lack the financial or legal resources to secure the necessary licenses [2]. The impact of these requirements could result in a narrower range of available applications, particularly in the decentralized finance (DeFi) space, where compliance costs may be prohibitive for many projects. As a result, some developers may be forced to seek alternative distribution methods, such as sideloading apps, to maintain access to users [2].

Google has outlined these new requirements in its official developer documentation, urging app developers to review the updated guidelines and secure the necessary authorizations to remain on the platform [2]. This development highlights the growing regulatory pressure on the crypto industry and underscores the importance of compliance as platforms like Google Play seek to maintain their reputations and adhere to national and international financial regulations.

The enforcement of these licensing requirements is expected to shape the future of crypto application development, potentially altering the landscape of wallet and exchange availability. While larger firms may adapt more easily, smaller innovators could struggle to meet the new standards, leading to a more consolidated and regulated market [2]. The long-term effects of these changes remain to be seen, but they signal a broader shift toward institutionalization within the cryptocurrency ecosystem.

Sources:

[1] Google Play's New Licensing Rules Threaten Non- https://www.benzinga.com/crypto/cryptocurrency/25/08/47107111/google-plays-new-licensing-rules-threaten-non-custodial-crypto-wallets-in-us-eu

[2] Google Tightens Rules for Cryptocurrency Wallets in Play https://quasa.io/media/google-tightens-rules-for-cryptocurrency-wallets-in-play-store

[3] Google Play Crypto Wallet Rules: Unprecedented Impact https://bitcoinworld.co.in/google-play-crypto-wallet-rules/