The Uniform Cash Companies Act (UMSA), mannequin laws promulgated by the Uniform Regulation Fee and adopted in entire or partially in a number of states, requires a license to “have interaction 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 forex trade, if the forex trade enterprise accounts for “revenues equal or larger than [five percent] of whole revenues” of a enterprise (although a cash transmitter typically wouldn’t must get hold of a forex trade 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 trade means “receipt of revenues from the trade 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 trade that’s licensed or adopted by america or a overseas 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 grow to be a medium of trade adopted by a overseas authorities. Underneath a plain-language studying, participating in predicate cash transmitter or forex trade actions with Bitcoin now might fall throughout the scope of each cash transmission and forex trade statutes in any state or territory that has adopted the UMSA definition of “cash.” Thus, the necessities of those legal guidelines might apply even in jurisdictions that haven’t in any other case affirmatively addressed digital forex 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 forex trade in U.S. jurisdictions through which they function. Sidley has a staff assessing these and different oblique results of the therapy of Bitcoin as authorized tender in El Salvador, together with on securities legal guidelines and tax legal guidelines.
1 Unif. Cash Companies Act § 201(a) (amended 2004).
2Id. § 401(a); see additionally § 401, cmt. 2.
3Id. § 102(14).
4Id. § 102(6).
5Id. § 102(12).