Google Enforces Stricter Licensing on Custodial Crypto Wallets

Google has imposed stricter licensing requirements for custodial cryptocurrency wallet apps on its Google Play Store, a shift that has sparked debate over regulatory compliance and the centralization of control in the crypto space. The updated rules, which will take effect on October 29, 2025, require developers of custodial wallets to obtain financial licenses in over 15 jurisdictions, including the United States and the European Union [1]. In the U.S., this entails registering as a Money Services Business (MSB) with the Financial Crimes Enforcement Network (FinCEN) and, in certain states, securing money transmitter licenses. In the EU, developers must comply with the Markets in Crypto-Assets (MiCA) framework and register as a Crypto-Asset Service Provider (CASP) [2].

The new requirements also mandate custodial wallet providers to implement Anti-Money Laundering (AML) and Know-Your-Customer (KYC) programs—standards typically applied to traditional financial institutions. However, for smaller crypto firms, these measures represent a significant operational and financial burden. Analysts suggest the policy may lead to greater market consolidation, favoring larger, well-funded players and potentially stifling innovation within the custodial wallet space [3].

Initially, the policy appeared to apply to both custodial and non-custodial wallet apps, prompting widespread concern among self-custody wallet developers. This led to backlash from the crypto community, which argued that the rules could limit access to decentralized tools and force users toward less secure alternatives. In response, Google clarified that non-custodial wallets—those that do not hold users’ funds—are not subject to the new policy. The company updated its Help Center and confirmed the exemption through its social media channels [4].

The transition period for compliance varies by jurisdiction. For instance, Germany will require MiCA-compliant CASPs after December 30, 2025, while France allows registration with the AMF until mid-2026 before enforcing MiCA requirements. These transitional periods aim to ease the regulatory burden on developers during the shift [5].

The updated policy reflects a broader trend of technology platforms acting as de facto financial gatekeepers. Google’s move aligns with the Financial Action Task Force’s (FATF) 2021 guidance on virtual asset service providers, which many countries adopt to avoid being blacklisted in global financial markets. The policy underscores how Big Tech is embedding regulatory compliance into its platforms, effectively shaping the operational landscape for blockchain services. As a result, developers increasingly depend on app store policies for market access, raising concerns about fairness, transparency, and the balance between compliance and innovation [6].

The revised rules mark a pivotal moment in the regulatory evolution of the crypto wallet ecosystem. While custodial wallet developers face heightened compliance demands, non-custodial developers have been granted relief. However, the broader implications suggest a growing influence of big tech in financial oversight, with potential long-term effects on competition, innovation, and user choice in the crypto market.

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Source:

[1] title: Google Play's new rules now put more regulatory burden

url: https://crypto.news/google-plays-new-rules-now-put-more-regulatory-burden-on-custodial-crypto-wallets/

[2] title: Google Play Store's New Crypto Wallet Rules

url: https://www.ccn.com/education/crypto/google-play-crypto-wallet-licensing-us-eu-rules-explained/

[3] title: Google Bows To Crypto Fury, Unbans Non-Custodial Wallets

url: https://www.mitrade.com/au/insights/news/live-news/article-3-1038767-20250814

[4] title: Google Play Tightens Crypto Wallet Policy — License

url: https://dzilla.com/google-play-tightens-crypto-wallet-policy-license-demands-developer-concerns-and-the-fate-of-self-custody/

[5] title: Google Blocks Non-Custodial Crypto Wallets from Play

url: https://coincentral.com/google-blocks-non-custodial-crypto-wallets-from-play-store-in-major-regulatory-shift/

[6] title: Google Play Enforces 15-Market Crypto Wallet Licensing

url: https://www.ainvest.com/news/google-play-enforces-15-market-crypto-wallet-licensing-rules-october-29-2025-2508/