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Money Transmitter Frequently Asked Questions

The North Carolina Office of the Commissioner of Banks charters, licenses and regulates a variety of financial institutions within the State. Answers to many of your questions and concerns may be found in this section or with the North Carolina General Statutes Article 16B Money Transmitter Act (MTA). Please use any of the links to the left for additional assistance. If you still need assistance, please call our office at (919) 733-3016, and we will be happy to assist you.

General FAQs

Q. How do I apply for a money transmitter license?

A: Applications for a money transmitter license must be submitted via the Nationwide Multistate Licensing System & Registry (NMLS). The application fee is $1,500 plus fees assessed by NMLS.

Q. Is stored value or “prepaid access” regulated under the MTA?

A: Yes.  Any business that issues stored value or prepaid access cards is defined as a money transmitter. 

Q. May I operate through authorized delegates?

A: Yes. N.C. Gen. Stat. § 53-208.44(c) authorizes delegates. Licensees (not NCCOB) must issue a certificate of authority to each location where the licensee conducts business through an authorized delegate. The certificate must be posted in public view and read as follows: "Money transmission on behalf of (insert name of licensee) is conducted at this location pursuant to the North Carolina Money Transmitters Act N.C.G.S. § 53-208.41 et seq." 

Q. My company only conducts business-to-business transactions, do I need a money transmitter license?

A: No. Money transmissions from a business to a business or from a business to a consumer do not require a money transmitter license. Per the MTA, money transmissions, including the sale or issuance of payment instruments or stored value, must be for personal, family, or household purposes. However, if you are acting on behalf of a business in taking money from a consumer, you may need a money transmitter license. 

Q. Is the transmission of virtual currency regulated under the MTA?

A: Yes. The NC MTA requires all persons engaged in the business of money transmission to obtain a license. The NC MTA defines "money transmission" as the "act of engaging in the business of receiving money or monetary value for transmission within the United States or to locations abroad by any and all means, including payment instrument, wire, facsimile, or electronic transfer," and further defines "monetary value" as a "medium of exchange, whether or not redeemable in money," Virtual currency is a form of monetary value. See N.C. Gen. Stat. 53-208.3(a), 53-208.2(a)(11)(b), and 53-208.2(a)(12) (2015).

Q. Are virtual currency miners and users regulated under the MTA?

A: No. As noted above, the NC MTA regulates the transmission of virtual currency. It does not regulate the use of virtual currency. A "user" is someone who uses virtual currency to buy or sell goods and services. A merchant who accepts virtual currency as payment for goods or services is a user and does not require a license. A "miner" is someone who receives virtual currency as payment for verifying transactions, typically by providing computer resources to process data. Once the miner has completed its work, the miner generally becomes a “user” of virtual currency.

Q. Are virtual currency exchangers and administrators regulated under the MTA?

A: It depends. A virtual currency exchanger is a person that exchanges virtual currency for fiat currency or other virtual currencies, and vice versa. An exchanger that sells its own stock of virtual currency is generally not considered a virtual currency transmitter under the NC MTA. In contrast, an exchanger that holds customer funds while arranging a satisfactory buy/sell order with a third party, and transmits virtual currency and fiat currency between buyer and seller, will typically be considered a virtual currency transmitter.

A virtual currency administrator is a person that issues or redeems virtual currency. Although administrators must register with FinCEN and comply with the Bank Secrecy Act, merely acting as an administrator generally does not require a license under the NC MTA.

Q. Are there special licensing requirements applicable only to virtual currency transmitters?

A: No. The MTA applies to all transmitters of monetary value equally. It does not distinguish between virtual currency transmission and fiat transmission.  

Q. Are Blockchain 2.0 technologies regulated by the NC MTA?

A: Generally, no. Blockchain 2.0 technologies refer to the use of the blockchain (or other similar virtual distributed ledger system) to verify ownership or authenticity in a digital capacity. This technology includes such software innovations as colored coins (i.e. coins that are marked specifically to represent a non-fiat-money asset), smart contracts (i.e. agreements implemented on a virtual distributed ledger), and smart property (i.e. property that is titled using a virtual distributed ledger). These uses of the blockchain generally do not involve the use of virtual currency as a medium of exchange. As a result, the NC MTA does not regulate these software innovations.

Q. Do providers of multi-signature software require a license under the NC MTA?

A: No. Multi-signature software allows a virtual currency user to distribute authority over his or her virtual currency among multiple different actors. This software requires multiple actors to authorize a virtual currency transaction before the transaction can be consummated. Specifically, a multi-signature provider holds one of two or more private keys needed to authorize transactions. Because the multi-signature provider cannot authorize a transaction alone, this provider is not holding virtual currency on behalf of another and does not engage in virtual currency transmission by signing transactions on behalf of the user. 

Q. Are wallet providers regulated under the NC MTA?

A: Generally, yes. A hosted, custodial wallet provider is in the business of storing a user's virtual currency on a remote computer until such time as the user desires to spend or exchange the user's virtual currency. The hosted wallet provider typically agrees to safeguard the user's private keys and make them available at some later date. This custodial function is regulated under the NC MTA.

In contrast, a non-hosted, non-custodial wallet is typically outside the scope of the NC MTA. A non-hosted wallet is a piece of software deployed on the user's own computer or device that makes the user's private keys easier to use by the user. In a non-hosted, non-custodial model, the software provider never gains access to the user's private keys and does not agree to transmit the user's virtual currency later.

Q. What information is required to be reported quarterly?

A: All money transmitter licensees are required to complete the Money Services Businesses Call Report (MSBCR) in NMLS. The report includes national and state specific MSB information that is submitted on a quarterly and annual basis. Filing dates are as follows:
Filing Reporting Period Due Date
Q1 January 1 - March 31 May 15
Q2 April 1 - June 30 August 14
Q3 July 1 - September 30 November 14
Q4 October 1 - December 31 March 15

Q. Is there an annual renewal?

A: No. The money transmitter license is perpetual and not assignable. However, licensees will need to participate in NMLS’ renewal process and pay the required fees to maintain its use of the system.

Q. Is a surety bond required?

A: Yes. The amount of the bond is based upon the aggregate volume of NC only transactions reported in the prior year’s MSBCRs. For new licensees, the surety bond should be in the amount of $150,000. Subsequent to initial licensure, the surety bond amount should be adjusted annually by May 31, using the aggregate year’s NC transaction volume. Use the table below to determine the bond amount:
NC Transmission Volume in U.S. Dollars Required Assessment
Up to $1,000,000 $150,000
Greater than $1,000,000 but less than $5,000,000 $175,000
Greater than $5,000,000 but less than $10,000,000 $200,000
Greater than $10,000,000 but less than $50,000,000 $225,000
Greater than $50,000,000 $250,000
Licensees are required to submit an electronic surety bond through NMLS. Paper bonds are no longer accepted.

Q. Are there any fees required after obtaining a money transmission license?

A: Yes. Each licensee is required to pay an annual assessment. The assessment consists of a base amount of $5,000 for volumes up to $1,000,000.00, plus an additional sum, calculated using the prior year's NC transaction volume. The cumulative assessment is calculated as follows:
NC Transmission Volume in U.S. Dollars Per U.S. Dollar
Greater than $1,000,000 but less than $5,000,000 $0.0008
Greater than $5,000,000 but less than $10,000,000 $0.0006
Greater than $10,000,000 but less than $50,000,000 $0.00004
Greater than $50,000,000 $0.0000006

Q. Are there annual reporting requirements?

A: Yes. No later than 90 days after the end of each calendar year, licensees shall file an annual report through NMLS, which shall include:
  1. Annual financial statement, including balance sheet, statement of income or loss, statement of changes in shareholder's equity, if applicable, and statement of changes in financial position. In the case of a licensee that is a wholly owned subsidiary of another corporation, the consolidated audited annual financial statement of the parent corporation may be filed in lieu of the licensee's.
  2. Any material changes to the information submitted by the licensee on its original application, which have not been previously reported through NMLS.
  3. Copies of bank statements and other documentation related to the existence and quality of the licensee's permissible investments.

Q. Are virtual currency kiosks regulated under the MTA?

A: It depends. Virtual currency kiosks that allow consumers to purchase or sell virtual currency, from the kiosk operator’s own supply of virtual currency, do not require a license under the MTA. Virtual currency kiosks that allow the transmission of virtual or fiat currency between consumers, or that hold virtual or fiat currency on behalf of consumers, require a license under the NC MTA.

Companies that operate virtual currency kiosks should verify ownership of the recipient’s wallet to ensure funds are not sent to a third party. If a company will not or cannot verify ownership, it must seek licensure under the MTA. In verifying ownership, operators of virtual currency kiosks cannot rely on ownership requirements hidden in terms of service. Rather, virtual currency kiosks should include a separate screen or highlighted interface in which the consumer specifically affirms ownership of the recipient wallet.