A cryptocurrency licence is the official authorization granted by government authorities to offer services related to virtual assets. This licence empowers a company to operate legally in the cryptocurrency market, adhering to the laws of a specific jurisdiction. While not all countries have embraced digital assets with a regulatory framework, the number of jurisdictions recognizing them is gradually increasing.
The procedures for obtaining a cryptocurrency licence can vary significantly across different states. Additionally, various countries may present companies within their borders with different types of crypto licences, including licences for cryptocurrency exchanges, DeFi platforms, blockchain providers, and more. Such licences grant owners the authority to:
- exchange various cryptocurrencies, including fiat money (learn more about cryptocurrencies here);
- safely store clients’ virtual currencies on a digital platform;
- facilitate transfers between digital wallets;
- participate in the issuance of cryptocurrencies, and more (you can find information about cryptocurrency issuers here).
Countries that regulate cryptocurrencies at the state level and issue official cryptocurrency licences include: the USA, Japan, UK, Switzerland, Singapore, Czech Republic, Estonia, UAE, Lithuania, Thailand, Kyrgyzstan, and Malta. Recently, this list frequently updates.
Obtaining a Crypto Licence: Standard Requirements
Each jurisdiction has unique requirements for companies, seeking to obtain a cryptocurrency licence, but several are standard across countries. To meet these basic requirements, a company typically needs to:
- be registered in the country where it is applying for a licence;
- ensure the availability of the necessary authorized capital as per the regulatory guidelines;
- have employees with suitable qualifications and experience;
- prepare the required hardware and software infrastructure;
- develop internal policies in accordance with the Anti-Money Laundering (AML) legislation of the chosen jurisdiction (for more information about AML, you can refer to this link);
- collect and submit the necessary documents as required by the regulatory authority.
The cost of obtaining a crypto licence varies in each country and typically depends on factors such as the type of cryptocurrency-related activities the company intends to engage in, among other considerations.
Benefits of a Cryptocurrency License
It is ultimately up to each company to decide whether to obtain a cryptocurrency licence. In some countries, digital assets-related activities are not regulated by the state; accordingly, a crypto company can register there and operate without special permission. Although having an official licence offers several advantages, including:
- a higher level of trust among clients and partners;
- the opportunity to expand the client base due to cautious users who prefer to engage with reputable services only;
- streamlining partnerships with financial institutions that are often hesitant to work with unregistered crypto businesses;
- easier access to international markets.