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Financial Services Law Insights and Observations

Virtual currency is not considered “money” in Pennsylvania; platforms do not need money transmitter license

State Issues Virtual Currency Licensing Money Service / Money Transmitters

State Issues

The Pennsylvania Department of Banking and Securities recently published guidance stating that virtual currency, including “Bitcoin,” is not considered “money” under the state’s Money Transmitter Act (MTA). According to the guidance, only “fiat currency,” or currency issued by the U.S. government is considered “money” under the MTA and that to transmit money under the MTA, (i) fiat currency must be transferred with or on behalf of an individual to a third party; and (ii) the money transmitter must charge a fee for the transmission. Because virtual currency trading platforms (along with virtual currency kiosks, ATMs, and vending machines) never directly handle fiat currency and there is no transfer of money from a user to a third party, they are not money transmitters under the MTA and therefore do not need a license in order to operate in the state.

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