The California Department of Business Oversight, which regulates money transmitters, has apparently found it necessary to issue certificates to licensees that they can show banks. From DBO’s October newsletter:
Some money transmitter licensees have reported difficulty maintaining or obtaining bank accounts. To help remedy this situation, the DBO has developed a Certificate of Licensure that money transmitters can use to show bankers and others that they are licensed and regulated under the Money Transmitter Act (Division 1.2 of the California Financial Code).
To obtain a Certificate of Licensure, please email the DBO Licensing Section at firstname.lastname@example.org.
This underscores the banking challenges we outlined in our report, “Overcoming Obstacles to Banking Virtual Currency Businesses.” While having some easy proof of licensure is a helpful step toward easing these challenges, it’s a small one. Regulators like DBO still need to make it possible for digital currency firms to become licensed, and banking regulators should reassess whether their strict oversight is leading to derisking that can stifle innovation.