Here Is Why Getting a Crypto License Could Be Your Biggest Competitive Edge

If you run a crypto exchange, a wallet provider, a crypto payments company, or any other business that deals with digital assets, chances are you’ve been asked this question many times: “Do you have a license?” It is a small but heavy question.

Some founders treat licensing as a box-ticking headache. But in truth, securing a crypto license will either make or break your business, legally and commercially. Why, you ask? Allow us to explain below!

Being on the good side of the law

A substantial number of states now require some crypto companies, such as exchanges, custodians, and ICOs, to possess a license. Without it, you may face heavy fines, closures, or even criminal prosecution.

The regulations are varied:

• Soon, in the EU, you will be required to act in accordance with MiCA (Markets in Crypto-Assets Regulation).
• In the US, the transferring of money requires a license and is applicable in most states.
• Crypto service providers in Singapore are required to register with the Monetary Authority of Singapore.

To stay legal is the first step in ensuring you will be in business long-term. Click here to know more.

Developing trust among customers and partners

Cryptocurrencies still have a trust issue. Behind every new and innovative blockchain project, there is a news story of a scam project or a hacked exchange. A license indicates that you have achieved certain compliance with regard to security, governance, and risk management.

That small regulatory stamp can:

• Persuade reluctant customers to deposit money.
• Assist you in acquiring partnerships with payment processors and banks.
• Minimize onboarding efforts with high-value clients.

Simply put, it is compliance and also marketing.

Expansion into new markets

A license in any jurisdiction usually serves as a passport to others. As an example, a registered crypto company in an EU country can engage in business throughout the whole of the European Economic Area without relicensing in the individual member countries.

Also, in jurisdictions not linked with a passporting regime, a recognized license may facilitate easier recognition in other jurisdictions. Regulators prefer to know you have been vetted already.

Attracting investors

If you are trying to attract capital, investors will want to know that you have been doing things right. A license lowers the risk profile of your business and demonstrates that you are committed, professional, and here to stay.

Some institutional investors cannot contemplate letting you pitch to them first without a license.

Being ahead of the curve

The world is becoming more restrictive regarding cryptos. What is optional today may be a requirement tomorrow. With a license in place, you do not have to scramble at a later date when new laws come into force. You can be a leader and not a complainer.

The bottom line

Obtaining a crypto license is more than escaping trouble. It opens opportunities, including reputation, financial support, joint ventures, and new markets. Yes, it is time-consuming, costly, and difficult to do. But then, you will have the type of foundation that can be shaken. That can be your greatest competitive edge in the fast-changing crypto world.