The Uniform Cash Providers Act (UMSA), mannequin laws promulgated by the Uniform Legislation Fee and adopted in complete or partly in a number of states, requires a license to “interact within the enterprise of cash transmission or promote, solicit, or maintain [one’s self] out as offering cash transmission.”1 A license is also required to do the identical for foreign money change, if the foreign money change enterprise accounts for “revenues equal or larger than [five percent] of complete revenues” of a enterprise (although a cash transmitter typically wouldn’t must get hold of a foreign money change license to offer such providers).2 Cash transmission is outlined as “promoting or issuing cost devices, saved worth, or receiving cash or financial worth for transmission.”3 Forex change means “receipt of revenues from the change of cash of 1 authorities for cash of one other authorities.”4 Critically, cash is outlined for functions of the UMSA as “a medium of change that’s approved or adopted by the US or a international authorities.”5 Some states that haven’t adopted the UMSA use related language.
By advantage of El Salvador’s adopting Bitcoin as authorized tender, it arguably has develop into a medium of change adopted by a international authorities. Below a plain-language studying, partaking in predicate cash transmitter or foreign money change actions with Bitcoin now could fall throughout the scope of each cash transmission and foreign money change statutes in any state or territory that has adopted the UMSA definition of “cash.” Thus, the necessities of those legal guidelines may apply even in jurisdictions that haven’t in any other case affirmatively addressed digital foreign money exercise in statute, regulation, or steering. Accordingly, companies engaged in Bitcoin exercise ought to fastidiously consider their enterprise fashions to evaluate whether or not the providers they’re offering would now be thought-about cash transmission or foreign money change in U.S. jurisdictions through which they function. Sidley has a staff assessing these and different oblique results of the remedy of Bitcoin as authorized tender in El Salvador, together with on securities legal guidelines and tax legal guidelines.
1 Unif. Cash Providers Act § 201(a) (amended 2004).
2 Id. § 401(a); see additionally § 401, cmt. 2.
3 Id. § 102(14).
4 Id. § 102(6).
5 Id. § 102(12).