Google Play Store Blocks Crypto Wallets Without Banking Licenses

Google has made a major change to its app store rules that will force most cryptocurrency wallets off Android phones. The new policy requires all crypto wallet developers to get banking licenses before they can offer their apps on the Google Play Store.

This rule affects 15 countries, including the United States and all European Union nations. The change means millions of Android users may lose access to popular self-custody crypto wallets unless those apps meet strict banking requirements.

New Rules Target Both Wallet Types

The Google Play policy treats all crypto wallets the same way, whether they hold user funds or not. This creates problems for non-custodial wallets, which let users control their own private keys without the wallet company ever touching their money.

In the United States, wallet developers must now register with FinCEN as a Money Services Business and get state money transmitter licenses. They could also operate as a federal or state-chartered bank instead.

Source: support.google.com

European Union developers face different rules. They must get authorization as a crypto-asset service provider under the Markets in Crypto-Assets (MiCA) regulation from their national authorities.

The policy also covers 13 other countries with their own specific requirements, including Canada, the United Kingdom, Japan, and South Korea.

Non-Custodial Wallets Face Bigger Problems

Non-custodial wallets will struggle most with these new rules. These apps let users store crypto without giving up control to a third party. Users keep their own private keys and take full responsibility for their funds.

But MiCA licenses in Europe are designed for companies that actually hold customer assets. The regulations define crypto-asset service providers as exchanges, trading platforms, and businesses that issue or hold custody of digital assets. A simple non-custodial wallet that never touches user funds doesn’t fit this definition.

This means non-custodial wallet developers in the EU may not even be able to get the required licenses, effectively banning them from the Play Store entirely.

The situation in America is also complicated. FinCEN’s 2019 guidance specifically excludes non-custodial wallets from money transmitter licensing requirements. Google’s policy goes beyond what federal law actually requires.

Industry Critics Call It Regulatory Overreach

Crypto industry experts argue that Google is enforcing rules that don’t exist in law. The requirements seem based on guidance from the Financial Action Task Force (FATF), an international body that fights money laundering.

FATF’s 2021 guidance suggested that even developers of non-custodial software could be considered Virtual Asset Service Providers if they have some control over the technology. However, FATF guidance is not legally binding law.

The compliance costs for money services business registration and state licensing would be massive for small wallet developers. These requirements typically force companies to hire compliance officers, implement anti-money laundering programs, and file regular reports with multiple government agencies.

Many independent developers who created free, open-source wallets will not be able to afford these compliance costs. This could eliminate competition and force users toward wallets from large, licensed companies.

Real-World Impact Already Showing

The crypto wallet industry has already seen enforcement actions that hint at this trend. Federal prosecutors charged the founders of Samourai Wallet with money laundering conspiracy in April 2024, leading to the seizure of their app from Google Play.

Trust Wallet, one of the most popular non-custodial wallets, was temporarily removed from the Play Store in April 2024 before being restored. These incidents show how quickly popular wallets can disappear from the official app store.

Users who lose access to wallet apps on the Play Store would need to download them directly from developers’ websites or use unofficial app stores. This creates security risks, as users might accidentally download fake wallet apps designed to steal their cryptocurrency.

The Future of Mobile Crypto Access

This policy change represents a fundamental shift in how people access cryptocurrency tools on mobile devices. Google’s app store reaches billions of Android users worldwide, making it the primary way most people discover and install crypto wallets.

The new rules favor large, well-funded companies that can afford banking licenses over innovative startups and independent developers. This could reduce innovation in the crypto wallet space and limit user choice.

Some wallet developers may choose to exit markets with strict licensing requirements rather than comply with expensive regulations. Others might restructure their businesses to work within the new framework.

The policy also raises questions about whether Apple will implement similar rules for the iOS App Store, which would affect iPhone users in the same way.

What This Means for Users

Android users should expect fewer crypto wallet options in the official Google Play Store going forward. Popular non-custodial wallets may disappear unless their developers can secure the required licenses.

The changes will likely push more users toward custodial wallet services offered by licensed exchanges and financial institutions. While these services provide regulatory protection, they also require users to give up control of their private keys.

People who value self-custody of their cryptocurrency will need to be more careful about where they get their wallet software and may need to look beyond official app stores for their preferred tools.