Promoting strength and fairness in
the financial services marketplace

  • Banks
  • Mortgage
  • Consumer Finance
  • Check Cashers
  • Money Transmitters
    • Enforcement Actions
    • FAQs
    • Find Licensees
    • Forms & Fees
    • Licensing Information
    • Legal & Compliance References
    • NCCOB Online Login
  • Refund Anticipation Loan Facilitators

Money Transmitter Frequently Asked Questions

The North Carolina Office of the Commissioner of Banks charters, licenses and regulates a variety of financial institutions within the State. Answers to many of your questions and concerns may be found in this section. Please use any of the links to the left for additional assistance. If you still need assistance, please call our office at (919) 733-3016 and we will be happy to assist you.

General FAQs

Q. How do I apply for a money transmitter license?

A: The money transmitter license application is available on our website under Forms and Fees. However, please call our office before sending your application for any pre-application requirements.

Q. Is stored value or “prepaid access” regulated under the Money Transmitter Act?

A: Yes.  Any business that issues stored value or prepaid access cards is defined as a money transmitter. 

Q. What information is required to be reported quarterly?

A: All money transmitter licensees are required to provide electronically uploaded quarterly reports to the Commissioner of Banks that provide all money transmission for the period including the number and dollar amount per agent or branch location, broken down by transmission type, per month. 

Q. Is the transmission of virtual currency regulated under the NC MTA?

A: Yes. The NC MTA requires all persons engaged in the business of money transmission to obtain a license. Because the NC MTA defines “money transmission” as the “act of engaging in the business of receiving money or monetary value for transmission within the United States or to locations abroad by any and all means, including payment instrument, wire, facsimile, or electronic transfer,” and further defines “monetary value” as a “medium of exchange, whether or not redeemable in money,” virtual currency is within the scope of the NC MTA. See N.C. Gen. Stat. 53-208.3(a), 53-208.2(a)(11)(b), and 53-208.2(a)(12) (2015). 

Q. Are virtual currency miners and users regulated under the NC MTA?

A: No. As noted above, the NC MTA regulates the transmission of virtual currency. It does not regulate the use of virtual currency. A “user” is someone who uses virtual currency to buy or sell goods and services. A merchant who accepts virtual currency as payment for goods or services is a user and does not require a license. A “miner” is someone who receives virtual currency as payment for verifying transactions, typically by providing computer resources to process data. Once the miner has completed its work, the miner generally becomes a “user” of virtual currency. 

Q. Are virtual currency exchangers and administrators regulated under the NC MTA?

A: It depends. A virtual currency exchanger is a person that exchanges virtual currency for fiat currency or other virtual currencies, and vice versa. An exchanger that sells its own stock of virtual currency is generally not considered a virtual currency transmitter under the NC MTA. In contrast, an exchanger that holds customer funds while arranging a satisfactory buy/sell order with a third party, and transmits virtual currency and fiat currency between buyer and seller, will typically be considered a virtual currency transmitter.

A virtual currency administrator is a person that issues or redeems virtual currency. Although administrators must register with FinCEN and comply with the Bank Secrecy Act, merely acting as an administrator generally does not require a license under the NC MTA.

Q. Are there special licensing requirements applicable only to virtual currency transmitters?

A: No. The NC MTA applies to all transmitters of monetary value equally. It does not distinguish between virtual currency transmission and fiat transmission. This Office applies the same standards to virtual currency transmitters as it does to traditional fiat transmitters.  

Q. Are Blockchain 2.0 technologies regulated by the NC MTA?

A: Generally not. Blockchain 2.0 technologies refer to the use of the blockchain (or other similar virtual distributed ledger system) to verify ownership or authenticity in a digital capacity. This technology includes such software innovations as colored coins (i.e. coins that are marked specifically to represent a non-fiat-money asset), smart contracts (i.e. agreements implemented on a virtual distributed ledger), and smart property (i.e. property that is titled using a virtual distributed ledger). These uses of the blockchain generally do not involve the use of virtual currency as a medium of exchange. As a result, these software innovations are not regulated by the NC MTA.  

Q. Do providers of multi-signature software require a license under the NC MTA?

A: No. Multi-signature software allows a virtual currency user to distribute authority over his or her virtual currency among multiple different actors. This software requires multiple actors to authorize a virtual currency transaction before the transaction can be consummated. Specifically, a multi-signature provider holds one of two or more private keys needed to authorize transactions. Because the multi-signature provider cannot authorize a transaction alone, this provider is not holding virtual currency on behalf of another, and does not engage in virtual currency transmission by signing transactions on behalf of the user. 

Q. Are wallet providers regulated under the NC MTA?

A: Generally yes. A hosted, custodial wallet provider is in the business of storing a user’s virtual currency on a remote computer until such time as the user desires to spend or exchange the user’s virtual currency. The hosted wallet provider typically agrees to safeguard the user’s private keys and make them available at some later date. This custodial function is regulated under the NC MTA.

In contrast, a non-hosted, non-custodial wallet is typically outside the scope of the NC MTA. A non-hosted wallet is a piece of software deployed on the user’s own computer or device that makes the user’s private keys easier to use by the user. In a non-hosted, non-custodial model, the software provider never gains access to the user’s private keys and does not agree to transmit the user’s virtual currency at a later time.  

Renewal FAQs

Q. Is there an annual renewal?

A: No. The money transmitter license is transitioning to a perpetual license. As part of the transition, licensees will start using the Nationwide Multistate Licensing System & Registry (NMLS) for NC license requirements.

Transition FAQs

Q. What is the transition period?

A: NCCOB expects that existing North Carolina money transmitter licensees will transition to the NMLS between November 15, 2016 and December 31, 2016. Existing licensees who fail to transition prior to December 31, 2016 will need to file a new application, including applicable fees, via NMLS. (In the event that the transition time frame is shorter than currently anticipated, NCCOB will post additional updates on this site and will avoid penalizing licensees for transition delays beyond their control.)

Q. How will I transition to the NMLS?

A: Existing NMLS users should login to “request transition.”

New NMLS users should visit the NMLS website to request an account. Upon receipt, licensees will login to NMLS and create a Form MU1. Control persons and executive officers may also be required to create their personal records in NMLS upon creation of a company account. For assistance with NMLS, contact the call center at 1-855-665-7123.

(Please note that there is a 24-hour delay between NMLS and NCCOB Online; changes made in NMLS are received by NCCOB the following business day.)

Q. Will I be required to pay the assessment before transitioning to NMLS?

A: Yes. Current licensees will pay assessments via NCCOB Online between November 1, 2016 and December 31, 2016. The transition request will not be approved until the assessment is paid.

Q. Will I be required to submit a new bond?

A: Maybe. Some licensees will see a change in their bond amount based on their reported volume for 2015. NCCOB plans to contact current licensees whose bond amount has changed based on the licensee’s reported volume for 2015. Only those licensees whose bond amount has changed will need to submit a new bond. The transition request cannot be approved until NCCOB receives the new bond.

The amount of the bond is based upon reported volume as of December 31, 2015. You can use the table below to calculate your bond amount:
Transmission Volume in U.S. Dollars Required Bond Amount
Up to $1,000,000 $150,000
Greater than $1,000,000 but less than $5,000,000 $175,000
Greater than $5,000,000 but less than $10,000,000 $200,000
Greater than $10,000,000 but less than $50,000,000 $225,000
Greater than $50,000,000 $250,000
NCCOB will accept either electronic surety bonds submitted through the NMLS E-bond project, or traditional surety bonds. Licensees who wish to meet their bonding requirement using an electronic surety bond should review the NMLS Resource Center page regarding Electronic Surety Bonds. Licensees who choose to submit a traditional surety bond should mail the original bond to NCCOB. (Please note that even if you upload a PDF copy of your traditional bond to NMLS, you will still need to mail the original bond to NCCOB.)

Q. When is the annual report due and what information does it include? How will I file it?

A: The annual report is due each year on or before March 31. It includes the following:
  1. A copy of the licensee’s most recent audited consolidated annual financial statement, including balance sheet, statement of income or loss, statement of changes in shareholder's equity, if applicable, and statement of changes in financial position. In the case of a licensee that is a wholly-owned subsidiary of another corporation, the consolidated audited annual financial statement of the parent corporation may be filed in lieu of the licensee's.
  2. The total amount of outstanding transmission obligations.
  3. Any material changes to the information submitted by the licensee on its original application, which have not been previously reported to the Commissioner.
  4. Copies of bank statements and other documentation related to the existence and quality of the licensee's permissible investments.
  5. A list of the branch offices where money transmission is conducted by the licensee or its authorized delegates.
The annual report is submitted via NMLS.

Q. When are quarterly reports due and what information do they include? How will I file it?

A: Quarterly reports are due 60 days after the end of each quarter. Quarterly reports include the following:
  1. The number and dollar volume of money transmission transactions in the State by activity type; and
  2. The total amount of outstanding transmission obligations.
Timely filing dates for each quarter are:
  1. May 31 for the quarter ending March 31;
  2. August 31 for the quarter ending June 30;
  3. November 30 for the quarter ending September 30; and
  4. February 28 for the quarter ending December 31.
Because of current limitations in NMLS, quarterly reports will be submitted via NCCOB Online.

Q. May I continue operating with delegates?

A: Yes. N.C. Gen. Stat. § 53-208.44(c) authorizes delegates. Licensees (not NCCOB) must issue a certificate of authority to each location where the licensee conducts business through an authorized delegate. The certificate must be posted in public view and read as follows: “Money transmission on behalf of (insert name of licensee) is conducted at this location pursuant to the North Carolina Money Transmitters Act. N.C.G.S. § 53-208.41 et seq.”