Stored-Value Money Transmission Regulation
Money transmission regulations are laws and statutes that govern the exchange of value between consumers. These regulations apply to a wide variety of activities, including traditional banking services, digital payments systems, and cryptocurrencies. This article will explore the specific rules and requirements regarding stored-value money transmission in both the United States and abroad.
United States Regulations
In the United States, money transmission is governed by state law under various statutes such as Uniform Money Services Act (UMSA) or The Bank Secrecy Act (BSA). Generally speaking, any business that engages in exchanging currencies for customers must be licensed with their state’s regulator or financial institution division. Depending on which types of currency exchanges they offer – such as fiat to cryptocurrency – some businesses may also need additional federal licensing from FinCEN (Financial Crimes Enforcement Network). At present there are no specific national regulatory guidelines for stored-value money transmission but certain states like New York have enacted separate legislation called “BitLicense” specifically written for cryptocurrency companies operating within their borders.
International Regulations
At an international level there are several organizations responsible for regulating stored-value transactions across different countries:
• Financial Action Task Force (FATF): This intergovernmental body has created standards related to combating money laundering and terrorist financing through its Forty Recommendations on Anti-Money Laundering & Combating Terrorist Financing initiatives; it is up to each nation’s government to pass relevant legislation implementing these standards into law. These recommendations also include provisions concerning virtual asset service providers/cryptocurrency exchanges/financial institutions such as KYC/AML obligations when offering cross border payments services involving virtual assets or digital currency transfers across jurisdictions;
• European Union Payment Services Directive 2 (PSD2): This directive requires payment service providers operating within EU member countries comply with customer authentication procedures when transferring funds internationally;
• Bank for International Settlements (BIS): This organization sets out global principles aimed at improving oversight over cross border payment activities by setting standards around data sharing between participating banks and other stakeholders involved in global payments networks; this includes requirements related compliance monitoring processes used by banks when processing foreign transactions involving virtual assets/digital currencies etc.;
• Organization for Economic Co-operation & Development: OECD provides guidance on how governments should best regulate cryptoassets while ensuring consumer protection rights remain intact during international payments made using distributed ledger technology platforms .
Conclusion
The regulation of stored value money transmissions can vary greatly depending upon country jurisdiction but one thing remains constant – all businesses engaging in these activities must ensure they understand their applicable legal framework before providing services so they don’t run afoul of local laws or incur fines due to noncompliance issues. Additionally, having an awareness about current developments happening globally will help them stay ahead of any amendments being introduced which could affect their operations going forward.
