In a financial landscape that is increasingly regulated and subject to oversight, Montana stands apart as the only U.S. state that does not require a Money Service Business (MSB) license.

While all other states have a legal framework that necessitates businesses such as money transmitters, foreing exchange dealers and cryptocurrency exchanges to obtain specific licenses, Montana has chosen a different path. This distinct approach poses both opportunities and challenges for MSBs, regulators, and consumers.

A Brief Overview of Money Service Businesses (MSBs)
Money Service Businesses provide financial services like money transfers, foreign currency exchange, crypto/fiat exchange services and check cashing. Due to the nature of these transactions, these businesses are often under significant scrutiny from state and federal regulators to prevent illegal activities such as money laundering and fraud.

Why Montana’s Lack of Licensing Stands Out
The absence of an MSB licensing requirement in Montana is a point of interest for a number of reasons. One of the most evident is that it simplifies the process of establishing such a business in the state. Without the need to apply for and maintain a state level license, companies can save both a lot of time and money.

This absence can also serve as an experiment for deregulation. By observing the money service businesses operating in Montana, regulators and policymakers can analyze whether the absence of a state-specific license has any noticeable impact on customer safety and the prevalence of illicit activities.

Risks and Challenges
Although the absence of a licensing requirement on a state level can be advantageous for MSBs, it does not mean an MSB incorporated in Montans is unregulated. Federal laws still apply, such as the Bank Secrecy Act (BSA) and Montana MSBs are still required to register with the Financial Crimes Enforcement Network (FinCEN) and adhere to federal anti-money laundering (AML) laws. Failure to comply with federal regulations can result in severe penalties.

Additionally, while operating in Montana might be less cumbersome from a state regulatory perspective, MSBs still need to navigate the licensing requirements of other states if they wish to operate in those states. However, Montana MSBs have become more and more popular for international use as of late, particularly for cryptocurrency related operations but also for money transmission and payment services in general. Typically the MSB would then offer services online only and not target any specific jurisdiction in a way that would trigger local licensing and regulatory requirements there. Having a customer in a certain country would not in itself be a trigger for local regulation in that jurisdiction in most cases.

Montana’s status as the only U.S. state without an MSB licensing requirement represents a unique case study in financial regulation. While the absence of such a requirement lowers the barriers to entry for MSBs, it does not exempt them from federal oversight or from AML/CFT compliance requirements. As the financial landscape continues to evolve, it will be interesting to see whether Montana’s unique stance on MSB licensing will become an outlier or a precedent. Either way, it adds a fascinating dimension to the ongoing dialogue about the role and scope of financial regulation in the United States. For information about Monata MSBs and how they can be used internationally, please visit