Google Play Tightens Rules on Crypto Wallets, Mandates Banking Licenses

Google Play Store has rolled out stringent new policies that effectively ban most cryptocurrency wallet apps unless developers secure banking or money service licenses. The updated rules apply across 15 jurisdictions, including the US, EU, UK, Canada, and Japan, requiring wallet providers—whether custodial or non-custodial—to comply with local regulatory frameworks.

In the US, wallet issuers must register as Money Services Businesses (MSBs) with FinCEN and obtain state money transmitter licenses, or operate as licensed banks. Even non-custodial wallets face stringent anti-money laundering (AML) and know-your-customer (KYC) requirements, contradicting FinCEN's 2019 stance that unhosted wallets aren't money transmitters. The EU demands compliance with MiCA's crypto-asset service provider (CASP) regime, while the UK and Japan enforce similar licensing through their financial regulators.

Critics argue the policy imposes unrealistic burdens on open-source wallet developers, forcing many to delist their apps. The cost of compliance could stifle innovation and limit access to privacy-focused tools. Google claims the changes aim to enhance user protection, but the move risks alienating a key segment of the crypto ecosystem.