What Is a Virtual Currency License? Types and Requirements

"Virtual currency license" is a term used to describe state authorizations for cryptocurrency businesses — but the term encompasses several different types of licenses depending on the state and the regulatory framework involved.

The Two Main Types of Virtual Currency Authorization

Standard Money Transmitter License Applied to Crypto

In most U.S. states, cryptocurrency businesses that qualify as money transmitters must obtain a standard money transmitter license — the same license required for traditional money transmission businesses. These states have determined that their existing money transmission laws apply to virtual currency businesses without creating a separate licensing category.

For most crypto companies, the licensing process in these states is identical to the process for any other money transmitter — application through NMLS, same financial requirements, same compliance documentation requirements.

Dedicated Virtual Currency License or Framework

A small number of states have created cryptocurrency-specific licensing regimes that exist separately from or in addition to standard money transmitter licensing.

New York's BitLicense is the most prominent example — a dedicated virtual currency business activity license created specifically for crypto companies in 2015. The BitLicense covers virtual currency business activities and requires comprehensive compliance documentation, cybersecurity program evidence, and consumer protection policies specific to virtual currency.

Wyoming has created a Special Purpose Depository Institution charter that allows crypto companies to function as regulated financial institutions specifically designed for digital asset custody.

Other states are actively developing or considering crypto-specific licensing frameworks as the industry matures.

Does Your Crypto Business Need a Virtual Currency License?

Whether a specific crypto business needs a virtual currency license — and what type — depends on the specific activities the business conducts and the laws of each state where it serves customers.

Centralized exchanges, custodial wallet providers, and crypto payment processors that qualify as money transmitters typically need either a standard money transmitter license or a dedicated virtual currency license in each state where they operate.

Non-custodial wallet software providers, mining companies, and certain other crypto businesses may have different licensing obligations depending on their specific activities.

Key Considerations for Crypto Licensing

New York priority. If you serve New York residents with virtual currency business activity, the BitLicense is almost certainly required. Given its complexity and long timeline, beginning the BitLicense application early is critical.

Most states use MTL framework. For most states, the crypto licensing analysis leads to a standard money transmitter license application through NMLS.

Rapidly evolving landscape. Crypto licensing requirements at the state level are changing faster than most other regulatory areas. Monitoring state legislative and regulatory developments is an ongoing obligation.

Frequently Asked Questions

Can a crypto company get one license that covers all states?

No. The United States does not have a unified national virtual currency license. Licensing is state by state, with different requirements in different jurisdictions.

Is a federal registration enough for crypto licensing?

No. Federal FinCEN registration as an MSB is a federal obligation separate from state licensing. State licenses are required for operating in states that mandate licensing for your specific activities.

How ComplyOne Helps

ComplyOne works with cryptocurrency companies to navigate the complex U.S. virtual currency licensing landscape — from determining licensing obligations through application preparation — through advisory services, compliance technology, or both.

Talk to the ComplyOne team to get started.

The information in this article is for general educational purposes and does not constitute legal or regulatory advice. Crypto licensing requirements are evolving rapidly. Consult qualified legal counsel before making licensing decisions.