Can I offer a cryptocurrency as a form of payment without violating financial regulations in Illinois? What are the requirements?

Cryptocurrency as a Form of Payment in Illinois

Illinois has not yet enacted any specific regulations regarding the use of cryptocurrency as a form of payment. However, the Illinois Department of Financial and Professional Regulation (IDFPR) has issued guidance on virtual currencies, stating that they are considered a form of “monetary value” and may be subject to regulation under the Illinois Transmitters of Money Act [1].

Under the Act, any person or entity engaged in the business of transmitting money must obtain a license from the IDFPR. The Act defines “money transmission” as “the sale or issuance of payment instruments or stored value, or the receiving of money or monetary value for transmission to a location within or outside the United States by any means, including but not limited to payment instrument, wire, facsimile, or electronic transfer” [1].

Based on this definition, it is possible that the use of cryptocurrency as a form of payment may fall under the definition of “money transmission” and therefore require a license from the IDFPR. However, it is important to note that this is not a definitive answer and further guidance may be needed from the IDFPR or other regulatory bodies.

Requirements for Money Transmitters in Illinois

If it is determined that the use of cryptocurrency as a form of payment falls under the definition of “money transmission,” the following requirements must be met in order to obtain a license from the IDFPR [2]:

• Submit an application and pay the required fees
• Provide proof of financial responsibility
• Provide fingerprints for a criminal background check
• Maintain a minimum net worth of $100,000
• Maintain a surety bond or other form of security in an amount determined by the IDFPR

Additionally, money transmitters in Illinois are required to comply with various reporting and recordkeeping requirements, as well as anti-money laundering regulations [2].

Conclusion

While Illinois has not yet enacted specific regulations regarding the use of cryptocurrency as a form of payment, it is possible that it may fall under the definition of “money transmission” and therefore require a license from the IDFPR. Money transmitters in Illinois must meet certain requirements and comply with various regulations in order to obtain and maintain a license. It is recommended to seek further guidance from the IDFPR or other regulatory bodies to ensure compliance with all applicable regulations.

[1] Illinois Department of Financial and Professional Regulation. (n.d.). Virtual Currencies. Retrieved from

[2] Illinois Department of Financial and Professional Regulation. (n.d.). Transmitters of Money Act. Retrieved from

Jurisdiction

Illinois

• General