By Glenn Lyvers, Instant Access · Published 13 September 2026 · Updated 13 September 2026 · ~9 min read
01 What Act 7 is
Pennsylvania's Money Transmission Business Licensing Law dates from 2 September 1965 (P.L. 490, No. 249). For most of its life it regulated money orders, cheque sellers and wire services. Senate Bill 202 of the 2025 session, sponsored by Senator Chris Gebhard, amended it to add virtual currency. The Senate passed it 49–0 on 26 March 2025, the House 201–2 on 25 June 2025, and Governor Shapiro signed it on 27 June 2025 as Act 7 of 2025 (P.L. 9, No. 7). Section 5 of the Act says it "shall take effect in 60 days", which makes the effective date 26 August 2025.
The Act renames the statute. Section 1.1 gives it a new short title: the "Money Transmission and Virtual Currency Transmission Business Licensing Law". The title of the 1965 act now reads: "Providing for the licensing and regulation of the business of transmitting money, virtual currency or credit for a fee or other consideration by the issuance of money orders, by the sale of checks or by other methods".
Before Act 7, the Department of Banking and Securities had reached a similar place by interpretation. Its Virtual Currency Statement of Policy, published 20 April 2024 and effective 15 October 2024, said the Department "interprets the definition of 'money' to include virtual currency, such as Bitcoin." Act 7 puts that position in the statute and the Department has said the statement of policy is rescinded as of the Act's effective date.
02 The new licence trigger, quoted
The operative change is a new paragraph (2) in section 2(a). The section now reads, in full:
Every element of paragraph (2) is a question a business has to answer about itself: Is it engaged in the business of transmitting? Is what it transmits virtual currency? Does it do so by means of a transmittal instrument? Is there a fee or other consideration? Is the transmission with or on behalf of an individual? The definitions that follow decide most of those.
03 Definitions: virtual currency and transmittal instrument
Act 7 adds a definition of "virtual currency" to section 1:
The only exclusions are closed-loop loyalty value and in-game currency. A proof-of-work coin such as Bitcoin — or Spearmint — is a medium of exchange and store of value and is not government-issued money, so it is inside the definition.
The definition of "transmittal instrument" was widened to reach virtual currency:
"Electronic transfer or other method for the … transmittal of … virtual currency" is broad enough to include an on-chain transaction. The Act also adds a definition of "self-hosted wallet" — "a digital medium or wallet in which the user has direct control of the controllable electronic records as outlined under 13 Pa.C.S. Div. 12" — which is the hook for the second carve-out below. (Division 12 of Title 13 is Pennsylvania's enactment of the UCC's 2022 controllable-electronic-records provisions.)
04 The two carve-outs in section 2(b)
Section 2(b) says the Act "does not apply to the following":
Commercial contracts
"Money transmission or virtual currency transmission between business entities in connection with commercial contracts, unless the contracts involve money transmission or virtual currency transmission for personal or household purposes involving individuals."
Self-custody, with a proviso
"The use of a self-hosted wallet, unless the individual with control of the controllable electronic records … in the self-hosted wallet transmits virtual currency as part of a third-party service on behalf of another individual in exchange for a fee or other consideration associated with the transmission."
The first carve-out protects B2B flows and stops at anything touching individuals' personal or household purposes. The second protects a person using their own wallet for themselves. Its proviso — "transmits virtual currency as part of a third-party service on behalf of another individual in exchange for a fee or other consideration associated with the transmission" — is the language a Pennsylvania examiner would test any service against. A self-hosted wallet does not put a business outside the Act if the business uses that wallet to move coins for other people for a fee.
05 What is not there: mining, integral services
Section 3 lists the statutory exemptions: banks, bank and trust companies, credit unions, savings banks, trust companies and similar regulated institutions, and their agents. That is the list. Compare it with FinCEN's federal framework, which excludes from the money-transmitter definition a person who accepts and transmits funds "only integral to the sale of goods or the provision of services" and which, in its 2019 guidance, says specifically that a mining pool's distribution of mined rewards to its members is integral to the mining service and is not money transmission (see the companion article).
Act 7 has no equivalent. There is no integral-services exemption, no mining exemption, no mining-pool exemption, no software or network-operator exemption, and no de minimis threshold. If a Pennsylvania business relies on the federal §5.4 position, it has to do so by argument from the elements of section 2(a)(2) — that what it does is not "transmitting virtual currency … with or on behalf of an individual", or that its fee is not "consideration associated with the transmission" — and not by pointing to a line in the statute.
06 What a licence requires
Act 7 also amended the qualification and security sections. To qualify, an applicant must, among other things:
| Requirement | Text |
|---|---|
| Net worth | "a tangible net worth of at least five hundred thousand dollars ($500,000) as determined by audited financials prepared in accordance with United States generally accepted accounting principles" |
| Bond | "a bond in the penal sum of one million dollars ($1,000,000) executed by a surety company authorized to transact business within the Commonwealth of Pennsylvania"; the Department may require an additional bond up to the average daily outstanding balance of money received for transmission in the Commonwealth |
| Application | Through NMLS, using Pennsylvania's Money Transmitter licence checklist |
| Agents | Agents must be appointed by written agreement; the licensee or exempt person "takes complete financial responsibility for the money or virtual currency being transmitted from the moment an individual initiates the transmission" |
| Federal compliance | Licensees must comply with the federal Bank Secrecy Act requirements applicable to money services businesses |
For a small operator these are not paperwork items. Audited GAAP financials and a seven-figure bond are the practical bar, and they are the reason the "do we need this licence at all" question has to be answered before a service opens rather than after.
07 The Department's notice: no grace period
The Department of Banking and Securities published a notice on the amendments in August 2025. Its key lines:
- "All persons that were engaged in the business of transmitting virtual currency by means of a transmittal instrument for a fee or other consideration with or on behalf of an individual were required to apply for a license or cease unlicensed activity as of October 15, 2024." — that is, the Department's view is that the obligation predates Act 7 by way of the 2024 statement of policy.
- "There will be no grace period for licensure when the Act 7 amendments become effective on August 26, 2025, and concurrently the VCSOP will be rescinded."
- "The Department does not provide licensing determinations, nor does it provide legal advice. The Department encourages you to engage legal counsel in all aspects of compliance, including but not limited to, license determination, license application, compliance management systems, compliance examinations, etc."
The last point matters for anyone hoping to ask the regulator whether they are covered. The Department has said it will not answer that question. The answer has to come from counsel, and the Department expects businesses to have obtained it.
08 Who is affected
The clearest cases are the ones the statute was written for:
- Exchanges and brokers that hold customer virtual currency and move it on customer instruction, for a fee.
- Custodial wallet providers — any service where the customer's coins are an entry in the provider's books and the provider sends them where the customer says.
- Payment and remittance apps that accept virtual currency from one person and deliver it to another.
- Kiosk operators and other services that convert and deliver virtual currency to individuals.
Less clear are businesses whose only "transmission" is a by-product of something else: node operators relaying transactions, software developers, and — the case that concerns this site — mining pools paying members their share of a block reward. The statute does not mention them, and the Department has not published guidance that does.
09 The open question for mining pools
A centralised mining pool receives a block reward at its own address and pays each miner their share. Read against section 2(a)(2), the argument that this is not licensable transmission runs on the elements: the pool is distributing a reward it earned, not accepting virtual currency from one person for delivery to another; the payment is to the miner's own self-hosted wallet; and the pool fee is compensation for running mining infrastructure, not consideration "associated with the transmission". The argument that it is covered runs on the breadth of "transmitting virtual currency … with or on behalf of an individual" and the proviso in 2(b)(2), which reaches a person who transmits "as part of a third-party service on behalf of another individual in exchange for a fee".
Neither reading has been tested in published Pennsylvania guidance, an enforcement action, or a court decision that we have been able to find. That is why Spearmint Mining's position is not "we are exempt" but "we have built the service so that the facts are as clear as they can be, and we will not open it until a Pennsylvania attorney has reviewed those facts against this statute." The design choices that make the facts clear — no hosted wallets, no deposits, no transfers, rewards paid only to the address the shares were mined under, the fee taken from the block reward before apportionment — are set out on the compliance page and in the compliance-by-design matrix.
10 Key takeaways
- Act 7 of 2025 (SB 202) was signed 27 June 2025 and took effect 26 August 2025; it renames the statute the Money Transmission and Virtual Currency Transmission Business Licensing Law.
- New section 2(a)(2) requires a licence to "engage in the business of transmitting virtual currency by means of a transmittal instrument for a fee or other consideration with or on behalf of an individual".
- "Virtual currency" covers any digital medium of exchange, unit of account or store of value that is not government money; only closed-loop rewards and in-game value are excluded.
- The only carve-outs are B2B transmission under commercial contracts and the use of a self-hosted wallet — with a proviso for anyone using that wallet to transmit for others for a fee.
- There is no mining, mining-pool, integral-services, software or de minimis exemption; the federal FinCEN analysis does not carry over.
- Licensing requires $500,000 audited tangible net worth and a $1,000,000 surety bond; the Department has said there is no grace period and it does not issue licensing determinations.
11 Questions people ask
What is Pennsylvania Act 7 of 2025?
Does Pennsylvania require a licence for cryptocurrency businesses?
Is there a mining or mining-pool exemption in Pennsylvania's Act 7 of 2025?
What are the requirements for a Pennsylvania money transmitter licence after Act 7?
Does the self-hosted wallet carve-out in Act 7 protect a mining pool?
Related on this site
12 Sources
- Act of 27 June 2025, P.L. 9, No. 7 (SB 202), amending the Money Transmission Business Licensing Law — enrolled text and bill history. palegis.us
- Pennsylvania Department of Banking and Securities, "Pennsylvania Money Transmitter Act Amendments" notice, August 2025 (quoted above). pa.gov/agencies/dobs
- Money Transmission Business Licensing Law, Act of 2 September 1965, P.L. 490, No. 249, 7 P.S. § 6101 et seq.
- 13 Pa.C.S. Division 12 (controllable electronic records), referenced by the Act's "self-hosted wallet" definition.
- FinCEN, FIN-2019-G001, §5.4 (mining pools), for the federal comparison. fincen.gov (PDF)