Pennsylvania’s Department of Banking and Securities (DoBS) has stated cryptocurrency exchanges do not need a money transmission license to operate in the state.
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According to the department, the only currency which is to be considered money is U.S. dollars, or other fiat currencies.
“To date, no jurisdiction in the United States has designated virtual currency as legal tender,” the department said.
The DoBS went on to state cryptocurrency, kiosks, ATM, and vending machines are also free to operate without a money transmission license.
“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,” the department stated.
This clarification of whether cryptocurrency is in fact money has been three years in the making.
In Jan. 2016, Pennsylvania state government officials sought to update the state’s definition of money to include cryptocurrency.
However, initial coin offerings (ICOs) operating at the federal level will fall under a different set of rules.
In March 2018, the Financial Crimes Enforcement Network (FinCEN) stated:
“An exchange that sells ICO coins or tokens, or exchanges them for other virtual currency, fiat currency, or other value that substitutes for currency, would typically also be a money transmitter.”