• Google Play Store now requires crypto wallet developers in 15 jurisdictions to get licensed before app publishing.
• Rules apply to both custodial and non-custodial wallets, creating steep compliance barriers.
• The move is seen as platform-driven enforcement rather than law-driven regulation.

Google Play Store has rolled out a new rule that will change how cryptocurrency wallet apps reach users. Developers in 15 regions, including the United States and the European Union, must now hold specific licenses before they can list their wallets on the platform. The goal, according to Google, is to keep its app store environment safe and compliant.

The rule does not distinguish between custodial and non-custodial wallets, creating challenges for developers of software that never actually holds user funds. In the U.S., this means registering as a Money Service Business with FinCEN. In the EU, it means obtaining authorization under the Markets in Crypto-Assets (MiCA) regulation.

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New U.S. Policy Threatens Independent Crypto Wallet Developers

Now, with this new US rule, MSB registration and, in a majority of cases, state money transmitter licenses are required from developers. Such registrations entail strict Anti-Money Laundering, Counter Terrorist Financing, and Know Your Customer standards. The providers of custodial wallets are already held accountable for these situations, but non-custodial wallets were exempted all along under FinCEN’s own 2019 rules.

By treating all wallets equally, Google’s policy would push the majority of independent non-custodial wallet projects off the Play Store. For tiny teams, the administrative effort and cost to stay fully compliant would be prohibitive.

Non-Custodial Wallets Face EU Play Store Ban

The EU side of the policy is no less restrictive. Google requires wallet developers to be licensed as Crypto Asset Service Providers under MiCA. These licenses are meant for platforms that handle user funds, such as exchanges or custodial services.

A simple non-custodial wallet would not be eligible for such licensing, effectively shutting those apps out of the Play Store in Europe. The result would be fewer independent wallet options for EU users, with only licensed service providers able to distribute through Google’s marketplace.

Commercial Power Over Legal Definitions

Commentators view this as something more than an update to policy. It is an indication of an emerging pattern whereby big tech enforces standards that exceed those that exist legally. As much as the Financial Action Task Force publishes guidelines on virtual assets, guidelines are not legally enforceable.

In 2021, FATF expanded its definition of a Virtual Asset Service Provider to potentially encompass non-custodial service if a central entity remains involved. In taking this broad interpretation, Google is placing non-custodial wallets within custodial-style regulations.

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