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Bitcoin [BTC] and other cryptocurrency exchanges are not money transmitters under MTA, says State of Pennsylvania

Priya

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Bitcoin [BTC] and other cryptocurrencies exchanges not money transmitters under MTA, says State of Pennsylvania
Source: Pixabay

The State of Pennsylvania has released a statement on Bitcoin and other cryptocurrencies on their official portal. This guidance is in relation to the Money Transmitter Act [MTA] aka Money Transmission Business Licensing Law applicable to virtual currency exchanges.

The official statement also reveals that the Department of Banking and Securities [DoBS] of Pennsylvania has received multiple inquiries from businesses engaged in providing services related to buying, selling and trading cryptocurrencies. This was followed by the DoBS stating that the guidance is being published as they will not be addressing all the requests on a case-by-case basis.

According to MTA, money is defined as currency or legal tender that is recognized as a medium of exchange. To add on, the law of Pennsylvania stated that currency issued by the US government is only recognized as money in Pennsylvania. Due to this, Bitcoin and other cryptocurrencies are not classified as money according to the act. The statement also points that in the US, there has been not a single jurisdiction that has declared digital currency as a legal tender.

“…Thus, in order to “transmit” money under the MTA, fiat currency must be transferred with or on behalf of an individual to a 3rd party, and the money transmitter must charge a fee for the transmission”

They stated that a majority of the requests related to guidance on the applicability of the MTA were from cryptocurrency exchanges that were web-based. This was further followed by the DoBS deeming that these platforms are “not money transmitters” under the Money Transmitter Act.

“The Platforms, while never directly handling fiat currency, transact virtual currency settlements for the users and facilitate the change in ownership of virtual currencies for the users. There is no transferring money from a user to another user or 3rd party, and the Platform is not engaged in the business of providing payment services or money transfer services.”

The DoBS also gave an official statement on Kiosks and ATMs. They said:

“In both the one-way and two-way Kiosk systems, there is no transfer of money to any third party. The user of the Kiosk merely exchanges fiat currency for virtual currency and vice versa, and there is no money transmission. Thus, the entities operating the Kiosks would not be money transmitters under the MTA.”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021

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Bitcoin [BTC] will likely reach $100,000 with a market cap of over $2 trillion before the end of 2021
Source: Unsplash

The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.

According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,

“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”

Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,

“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”

Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,

“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”





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