The Conference of State Banking Regulators (CSBS) on Tuesday announced a new regulatory regime for monetary services companies that would allow businesses to pass a one-time compliance test, rather than seeking a state-by-state license as it currently does.

Reuters reports that the new rules apply to 78 major payment and cryptocurrency firms, which total more than $1 trillion in transactions annually. As a result, it will be easier for such companies to enter the markets of several states at the same time.

Previously, companies, primarily cryptocurrencies, complained that separate licensing in each state creates unnecessary difficulties for them. State regulators have been preparing the legal framework for several years. Under the new conditions, a commission from several states will be formed, which will take on the task of monitoring the activities of the respective companies.

A dubious move

While on the one hand issuing licenses is a positive step for the tech industry in the United States we should also say that Fintech and crypto are not always connected and are different fields. Fintech is a very vast industry and cannot obey only one set of rules. For example in the Australian Fintech industry crypto regulations are completely separate from Fintech regulations. Because of that, any Australian fintech company operates freely outside crypto, but if we merge them then these companies would be restricted by the aforementioned crypto regulations.

We would like to talk about Monzi which is a perfect example of an Australian fintech company operating under direct fintech regulation in Australia as opposed to crypto regulation

If they had to combine their operations and also adhere to the crypto guidelines it would basically be an infringement on client privacy thus violating several other regulations while following another

It is unclear how the US will manage to perfectly fit this fintech/crypto regulation in an already confusingly woven set of laws without breaking any of them

What’s more in this decision?

CSBS CEO John Ryan said the new system will be as robust as ever, but more efficient. States will share the results of inspections, and each of them will have the right to conduct an additional independent examination, if necessary.

The new regulatory regime will operate in 48 states and will affect companies such as Coinbase, Ripple, PayPal, and Western Union. The latter noted that this will also reduce the burden on the administrations of individual states and allow them to collect a commission of the best specialists.

How is crypto regulated in the USA?

The trade and promotion of tokens in the United States are subject to federal and local consumer protection laws. According to them, fraud, fake advertising, and news, deception is prohibited. For the violation of the law, the company will have to pay a fine 2-3 times more than the amount of damage, sometimes the company's managers may face imprisonment.

In October 2017, Acting Comptroller of the United States Currency, Keith Noreik said he was considering introducing a nationwide licensing program for cryptocurrency exchanges, similar to the recently adopted program in Japan. This hypothetical licensing system could provide a unified regulatory framework for crypto exchanges.

The close attention of the US authorities to cryptocurrency exchanges can be called a step towards full government regulation of sites. Government-formulated rules can reduce the risks of fraud and provide investors with investment protection guarantees. But you will have to pay for security - the crypto market, in this case, will approach the classical stock market, losing anonymity and lack of control. This is a topic that is always a subject of debate and controversy.

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