Regulatory complexities and state-by-state variation in money transmitter regulation laws are a barrier to blockchain’s growth in the U.S. Since they don’t handle customers’ money, there’s no reason for non-custodial blockchain entities to register as money transmitters. Codifying this in law would boost U.S. blockchain and cryptocurrency competitiveness.
Individual states already have laws regulating money transmitters’ registration requirements, and it’d be overreach for the federal government to override those state-level regulations. Additionally, it’s not clear cryptocurrency exchange and blockchain entities should be required to register as money transmitters under existing law.