The latest details of the 2025 US MSB license

Wise Consulting will introduce the content, differences, application conditions and procedures of these two licenses to everyone.

Author: Wise Consulting, @wisefc1

Cover: Photo by Donovan Reeves on Unsplash

Obtaining the MSB license means that the company meets the financial compliance standards in the US and globally. This greatly helps the trust of investors and the reputation of the company in the international market.

In 1999, the US enacted the Gramm-Leach-Bliley Act, which clearly defined the identity of non-bank payment institutions as money transfer service providers. To engage in such business, companies usually need to obtain the Money Services Business (MSB) license and the Money Transmitter License (MTL).

One, Money Services Business (MSB) License

The MSB license is a federal-level financial license, regulated by the Financial Crimes Enforcement Network (FinCEN) under the US Department of the Treasury, mainly applicable to institutions engaged in various money services businesses. The key points of this license are as follows:

Application and Regulatory Authority

The MSB license is registered and regulated by FinCEN. Any company involved in money transactions, exchange, check cashing, issuance and sale of traveler's checks or money orders, and postal services, etc., needs to register as an MSB with FinCEN. It should be noted that MSB registration does not cover banks, companies registered with the US Securities and Exchange Commission (SEC), or companies registered with the Commodity Futures Trading Commission (CFTC).

Regulatory Requirements

After becoming an MSB, the company is recognized as a financial institution and must strictly comply with the various obligations of the Bank Secrecy Act (BSA). These obligations include regularly submitting financial transaction reports and complying with anti-money laundering (AML) compliance requirements to ensure the legality and compliance of financial transactions.

Why does everyone recommend the MSB license?

—2025 US MSB License Latest Details

Two, Difference between MSB and MTL

Although MSB and MTL both have financial license attributes, there are important differences between the two:

Scope of Application: MSB is a federal-level license, covering a wider range of businesses, including the issuance of money orders, check cashing, the sale of traveler's checks, currency exchange, etc. MTL, on the other hand, is handled at the state level, specifically for companies engaged in money transfer and remittance services.

License Acquisition Requirements: A company that wants to engage in money transfer business and involves an amount exceeding $1,000 per day, needs to first register as an MSB with FinCEN.

After obtaining the MSB license, if the company wants to provide money transfer services across various states, it also needs to apply for the MTL license in each state.

Three, Advantages of the MSB License

The MSB license is highly valuable, and licensed companies have a high degree of recognition in the market. The following are several advantages of this license:

Global Investor Recognition

The US financial regulatory system is well-developed, and obtaining an MSB license means that the company meets financial compliance standards in the US and globally. This greatly helps the trust of investors and the reputation of the company in the international market.

Authoritative Approval

The MSB license is a legally approved license by the US Department of the Treasury, with very high authority. This means that the company can conduct business in the US and globally, and be subject to relevant regulatory compliance.

Enhance Visibility

For digital currency trading platforms, the MSB license is a standard configuration. Mainstream exchanges such as Coinbase, Bitfinex, Huobi, and Binance all hold the MSB license, which not only enhances the legitimacy of their platforms, but also increases their visibility and user trust.

Diversified Services

MSB license holders can provide diversified services such as currency exchange and remittance, meeting various financial needs of customers. At the same time, since the MSB license does not require the payment of a deposit or monthly maintenance fee, and the application is relatively simple, it has a high cost-performance ratio.

Four, Which Companies Need the MSB License

All US companies providing money services need to apply for the MSB license. Specifically, the following types of companies need to hold this license:

Bill of Exchange and Traveler's Check Business: Includes the issuance, sale, and redemption of bills of exchange and traveler's checks. If a company issues or sells more than $1,000 worth of traveler's checks or bills of exchange to any person in a single day, it is considered a money services business (MSB) and must apply for an MSB license.

Remittance Service: Companies that provide fund transfer services, such as transferring funds from one person or location to another, must hold an MSB license.

Check Cashing Service: Companies or individuals who cash checks exceeding $1,000 for others in a single day must also register as an MSB, especially if the cashing activity is not related to the sale of prepaid instruments.

Currency Exchange: Companies engaged in foreign currency exchange, i.e., those that accept more than $1,000 in foreign currency per day, must also apply for an MSB license to ensure their legality.

Prepaid Services: Companies that provide prepaid services, including accepting customer prepayments and allowing customers to retrieve funds electronically, must also register as an MSB.

V. MSB License Application Process

Company Registration: Applicants must register a company in the United States. It is recommended to complete the company registration in any of the 50 states, and the applicant can be a new or existing company.

Apply for an EIN Federal Tax Number: Applying for an MSB license requires the company to have an EIN federal tax number, but a bank account is not necessary.

Develop a Financial Business Plan: Companies need to clearly define their financial business operations plan to ensure the MSB application aligns with their actual business needs.

Prepare Application Materials: The application materials include the full set of company documents (preferably a U.S. company) and detailed personal information of the directors. After submitting the application materials to FinCEN, the information must be regularly updated to ensure the license's continued legality.

Submit the Application and Respond to Inquiries: After submitting the MSB application to the U.S. Department of the Treasury, Zhihui Consulting will assist in answering questions from FinCEN during the application process. The application process typically takes 1-2 weeks.

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