Google Forces Crypto Wallet Developers to Get Banking Licenses in US and EU Markets

Google Play Store has announced a significant policy shift requiring cryptocurrency wallet developers to obtain banking or money services licenses before their apps can be listed in the U.S. and EU markets [1]. The new rules apply to 15 jurisdictions and do not differentiate between custodial and non-custodial wallet types [2]. In the U.S., developers must register with FinCEN as a Money Services Business or operate under a state money transmitter license or as a bank [2]. In the EU, compliance with the Markets in Crypto-Assets (MiCA) regulatory framework as a crypto-asset service provider is required [1].

The policy has drawn criticism from some quarters, particularly due to a 2019 FinCEN guidance that explicitly excluded non-custodial wallets from the scope of money transmitter regulations [1]. Critics argue the new rule may overstep existing legal boundaries and impose unnecessary burdens on developers [2]. Gabor Gurbacs, a financial commentator, highlighted concerns that the policy could disproportionately impact smaller wallet providers and reduce the diversity of available services on the Play Store [3].

From a regulatory standpoint, the move aligns with broader global efforts to bring crypto activities under traditional financial oversight. By enforcing FinCEN and MiCA compliance, Google is reinforcing the role of tech platforms as gatekeepers in the implementation of anti-money laundering (AML) and Know Your Customer (KYC) measures [2]. This reflects the increasing pressure on the crypto industry to meet the standards of conventional financial services.

For users, the policy brings both potential benefits and drawbacks. On one hand, it could improve the overall security and reliability of crypto wallets available through the Play Store, reducing the risk of fraud or poorly managed services [2]. On the other hand, the licensing requirements may limit access, particularly for users of open-source or decentralized solutions that lack the resources to navigate regulatory hurdles [2]. This has raised concerns about whether the policy will favor larger, well-funded firms over smaller or independent developers.

The new rules also highlight the growing tension between the decentralized nature of crypto and the centralized demands of regulation. While some see the policy as a necessary step toward mainstream acceptance, others worry it may undermine the core principles of blockchain technology [2]. In response, some developers may explore alternative distribution methods, such as web-based or self-hosted wallets, to circumvent app store restrictions.

Google has not provided a specific enforcement timeline for the policy but has made it clear that compliance is mandatory for developers targeting the U.S. and EU markets [4]. The company’s recent strategic partnerships with financial services firms such as Wise and Klarna indicate a broader push into the digital payments space, including crypto [4]. These moves suggest Google is positioning itself as a central player in the evolving regulatory and financial ecosystem.

Source:

[1] Google Play Store to block crypto wallets without banking licenses in US and EU. (https://cryptobriefing.com/google-play-ban-non-custodial-wallets-licenses/)

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

[3] Google Play Store 新政策要求加密钱包应用开发者取得牌照. (https://www.binance.com/square/post/28272478646841)

[4] Google makes payments play. (https://finance.yahoo.com/news/google-makes-payments-play-094400199.html)