Google Play Store has added a rule that forces software wallet developers to hold a license before they can publish crypto wallet apps in 15 jurisdictions, including the EU and the US.
The move aims to tighten safety and compliance for users. Google lists specific legal steps developers must take, such as registering with FinCEN in the US or obtaining a MiCA license in the EU.
The policy treats custodial and non-custodial wallets the same, which creates heavy compliance demands for many small developers. Google will enforce the rule through its developer requirements on the Play Store.
What does the policy require?
Under the new rule, app makers must follow the laws Google names for each jurisdiction. In the US, developers must either register with FinCEN as a Money Services Business and meet state money transmitter rules or be a federally or state-chartered bank.
In the EU, developers must be authorised as a Crypto Asset Service Provider under MiCA and meet any extra local rules.
Google’s guidance does not separate wallets that hold users’ funds from those that only provide software. That means a non-custodial wallet that never touches user funds would still face the same licensing hurdles as a firm that stores or moves customer assets.
Why non-custodial developers are worried
Non-custodial wallets let users keep full control of their private keys. They are often open source and run by small teams. The compliance programs required of an MSB are costly.
They need strong anti-money laundering controls, KYC systems, monitoring, and reporting. For many small projects, those costs are impossible to meet.
If Play Store policy forces MSB-level controls on non-custodial apps, many developers may stop publishing on Android devices. That could shrink the range of wallets available on phones out of the box. It may also limit innovation in free software projects that rely on wide distribution.
The US angle
Google says US developers must register with FinCEN or be a bank. FinCEN’s 2019 guidance drew a legal line between hosted wallets that custody funds and unhosted wallets that do not.
FinCEN has not treated unhosted wallets as money transmitters in its 2019 guidance. The Play Store rule goes further than that guidance by tying app distribution to MSB registration for all software wallets.
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That difference raises practical questions. Many non-custodial wallets do not fit the MSB model. Yet under Google’s rule, they would face MSB requirements. That could mean forced KYC checks for users and extra costs for developers, even if the app never handles funds.
The EU angle
In the EU, Google points to MiCA as the relevant regime and MiCA issues licences to Crypto Asset Service Providers. CASPs are defined to include exchanges, trading platforms, and any business that issues or holds custody of digital assets.
A basic non-custodial wallet is not a CASP under MiCA’s custody rules. So a MiCA licence would not normally be granted to a simple wallet app. Under Google’s policy, however, only entities with CASP-like authorisation could publish. That would effectively exclude many non-custodial wallet makers from the Play Store in EU markets.
FATF guidance and how it fits
Google’s move echoes parts of the Financial Action Task Force guidance from 2021. FATF suggested a risk-based view that, in some cases, could view certain front-end services as virtual asset service providers.
FATF does not make binding law. Its guidance aims to shape national rules and firm risk policies.
What could happen next?
Developers and industry groups may push back, and regulators could also weigh in to clarify how app stores should treat non-custodial tools. Some teams may move to other distribution channels or focus on web-based wallets, while others may pursue partnerships with licensed entities to meet Play Store rules.
For users, the short term could mean fewer wallet choices on Android devices. For developers, the cost of compliance may rise.
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