This policy is particularly focused on 15 jurisdictions, including the European Union (EU) and the United States, and delineates specific regulatory frameworks that developers must adhere to in order to participate in the platform.
This represents a significant hurdle for non-custodial wallet developers—those not holding users’ funds—who, under FinCEN’s 2019 guidance, are not classified as money transmitters.
As a result, the policy imposes compliance demands that far exceed existing legal requirements, effectively putting many non-custodial wallets at risk of being excluded from the Play Store.
However, this licensing framework is tailored for entities that manage or hold custody of digital assets, effectively excluding simple non-custodial wallets from obtaining the necessary licenses. Consequently, only licensed CASPs will be able to offer wallet services on the Play Store in the EU, further narrowing the market.
This policy aligns closely with the recommendations set forth by the Financial Action Task Force (FATF), which provides guidance on managing risks associated with virtual assets and their service providers.
While FATF’s recommendations are not legally binding, they serve as a regulatory framework for countries to develop their own regulations.
This creates a complex landscape where commercial entities like Google may enforce compliance measures that go beyond statutory requirements, driven by the desire to mitigate risk and maintain a secure ecosystem.
This ambiguity complicates the regulatory environment further, as developers may find themselves subject to custodial regulations despite not directly managing user funds.
Overall, the introduction of these licensing requirements by major platforms like Google marks a shift towards what could be termed “regulation by commercial enforcement.”
Featured image from DALL-E, chart from TradingView.com
