The Pennsylvania Department of Banking and Securities (DoBS) has issued a document stating the true meaning of the Money Transmitter Act (MTA) in response to queries received from various entities engaged in cryptocurrency-related activities.
In the document dated Jan.23, the state’s DoBS elucidated on the topic of cryptocurrency, saying that as of this date, “no jurisdiction in the United States has designated virtual currency as legal tender.” It is also clearly specifies that crypto exchanges do not require licenses to operate and provide crypto services to Pennsylvanian citizens.
The MTA – also short for the Money Transmission Business Licensing Law, has outlined money as a “currency or legal tender or any other product that is generally recognized as a medium of exchange.”
The license is a must for crypto traders since a section of the act states that “[n]o person shall engage in the business of transmitting money by means of a transmittal instrument for a fee or other consideration with or on behalf of an individual without first having obtained a license from the [DoBS].”
However, a clear meaning of “business of transmitting” is hard to find in the MTA, although, for transmission of money under the act “fiat currency must be transferred with or on behalf of an individual to a 3rd party, and the money transmitter must charge a fee for the transmission.”
The document also clears the air with regard to ATM’s, Virtual currency kiosks and vending machines, noting that since there is a simple trade involving fiat currency for virtual currency and vice-versa, there is no money transmission involved, and thus, these entities do not fall under the MTA.
In an article published last week, a bill was recently resubmitted in the U.S. Congress by one of its members that reportedly exempted firms providing non-custodial crypto services from a number of state money transmitting laws.