Nevada is bringing bitcoin ATMs more directly into the scope of its money transmitting regulations.
The Nevada Financial Institutions Division (NFID) released a memo clarifying how bitcoin businesses, specifically those that facilitate exchange, may be regulated under existing state laws.
“Over time, the NFID has monitored the growth and expansion of the blockchain, bitcoin, and virtual currency industries,” the memo reads. “Recently, several businesses and interested persons contacted the NFID to determine if a license was required to operate within the State of Nevada. Based upon the business model presented, a license may have been required for money transmission under NRS Chapter 671.”
Bringing Bitcoin ATMs Under Legislation
Lacking specific legislation, the Silver State has defaulted to treating bitcoin ATMs, among other bitcoin businesses, as money transmission services. A bill (S.B. 195) that would have erected an entirely new scheme for regulating bitcoin financial services failed to pass in Nevada’s senate in February 2019, during which time the government stayed licensing for bitcoin ATMs and the like.
Now, however, officials are calling on bitcoin businesses to come forward and work with the state.
“Any entity that facilitates the transmission of or holds fiat or digital currency by way of brick-and-mortar, kiosk, mobile, internet or any other means, should contact the NFID to request a licensure determination,” according to the memo. “Generally, any entity engaged in the business of selling or issuing checks or of receiving for transmission or transmitting money or credits is required to have a license under NRS 671,” which governs the state’s money transmission services.
Though bitcoin ATMs and the bulk of other business probably fall under this regulatory umbrella, not every bitcoin business may be a money transmitter, the memo clarifies.
“[I]f an entity proposes to serve as a digital custodian for any form of digital currency, then the business may be regulated as a trust company,” for instance.
According to Coin ATM Radar the state features 110 bitcoin ATMs, while the U.S. totals around 3,000. Nevada is typically billed, at best, as one of the U.S.’s more bitcoin and blockchain friendly states; at the least, S.B. 195 was a progressive attempt, though a failed one, to clarify cryptocurrency regulations.