U.S. MSB Daily News
USMSB.com — The Federal Money Services Business Association (FedMSB) has unveiled an industry-wide definition of Money Services Businesses (MSBs), in a bid to give academics, regulators, and the MSB sector a common language for talking about the business of moving money.
The new framework, released Monday in Manhattan, defines an MSB as any enterprise that handles, moves, exchanges, stores, or converts monetary value — whether that value is held in cash, electronic payment rails, or digital systems.
In plain terms, FedMSB says the MSB universe includes firms involved in:
- Value transfer and remittance services
- Currency exchange or conversion
- Payment, settlement, or wallet services
- Stored-value and prepaid access
- Check cashing and cash management
- Digital asset and other virtual value transfer or exchange services
Taken together, the association says, these businesses share a single economic function: they keep value circulating, exchanging, and moving for the public.
“The industry needed a clear definition”
FedMSB pitches the move as a bridge between academic theory and what actually happens on the ground in payment shops, fintech apps, and digital-asset platforms.
“With payment tech and digital assets evolving so quickly, the sector needed a clear, authoritative MSB definition,” said Michael Mynn, Editor-in-Chief of Bitcurrency Journal, who welcomed the new framework as a benchmark for future research and policy debates.
FedMSB spokesperson Jenni said the goal is to give companies, regulators, and lawmakers a shared reference point: a standardized description of what counts as an MSB in the broad, economic sense — not just in the narrow regulatory sense.
Industry vs. regulation: two tracks, one term
A key theme of the announcement is that “MSB” means two different things in U.S. practice:
- Industry definition (FedMSB version)
- Casts a wide net over any business that helps monetary or quasi-monetary value circulate: remitters, FX shops, payment apps, stored-value issuers, check cashers, digital-asset platforms, and more.
- Focuses on the economic role those firms play in moving and transforming value.
- Regulatory definition (FinCEN/BSA version)
- Comes from the Bank Secrecy Act and is enforced by FinCEN.
- Covers specific categories of activity that trigger registration and AML obligations, including:
- Money transmission
- Currency dealing or exchange
- Check cashing
- Issuing, selling, or redeeming money orders or traveler’s checks
- Providing prepaid access
- Acting as a dealer in foreign exchange
FedMSB stresses that its own definition is not a rewrite of BSA rules. Instead, it’s meant to describe the full economic scope of MSB activity, while FinCEN’s categories are aimed at deciding which firms must register and comply with federal AML oversight.
“The regulatory label is about who falls under BSA/AML supervision,” the framework notes, “not about capturing every business that participates in the value-circulation ecosystem.”
Why it matters for professionals
By setting out a “dual-track” view — broad industry scope vs. narrower legal category — FedMSB is nudging professionals to think in two layers:
- Industry breadth: the full array of firms enabling value circulation, whether or not they are formally registered MSBs.
- Compliance boundaries: the subset of those firms that cross activity thresholds and land inside FinCEN’s official MSB regime.
FedMSB argues that treating both layers together will sharpen research, improve risk assessments, and reduce confusion for companies designing products at the edge of traditional finance and emerging digital value systems.
For compliance officers, lawyers, and regulators, the new framework offers a cleaner way to talk about the difference between “who is in the business of moving value” and “who must comply with BSA/AML rules.”
U.S. MSB Daily News
Money News • Regulatory Analysis • Law Library
Leave a Reply