On June 26, 2025, the Conference of State Bank Supervisors (CSBS) issued its first advisory guidance under the Money Transmission Modernization Act (MTMA), offering clarity on how virtual currency should be treated in calculating a money transmitter’s tangible net worth (TNW).
The guidance is part of CSBS’s ongoing effort to promote uniform state supervision for money transmission while adapting to the growing role of digital assets.
“We are very pleased to issue the first CSBS advisory guidance to support the consistent, effective, and transparent implementation of the MTMA,” said CSBS President and CEO Brandon Milhorn.
Read the full press release →
What Is the MTMA?
The MTMA is a model state law developed by regulators and industry stakeholders to create consistent standards across the U.S. for:
- Tangible net worth (TNW) requirements
- Surety bonds
- Permissible investments
- Licensing standards
It is intended to streamline compliance, reduce regulatory fragmentation, and protect consumers. As of this advisory, 27 states have adopted the MTMA, covering roughly 99% of the nation’s licensed money transmission activity through the Nationwide Multistate Licensing System (NMLS).
Scope of the New Virtual Currency Guidance
The new advisory provides interpretation and implementation guidance for two key MTMA provisions:
- Section 2.01(bb) – Defines “tangible net worth” as total assets minus all intangible assets, less liabilities, using GAAP standards.
- Section 10.01 – Requires licensees to maintain a minimum TNW based on the following tiered structure:
- 3% of the first $100 million in total assets
- 2% of the next $900 million
- 0.5% of assets exceeding $1 billion
The guidance emphasizes that virtual currency is generally considered an intangible asset and must be treated accordingly—unless it is held specifically to cover customer obligations in the same virtual currency.
Key Policy Takeaways
CSBS outlined several guiding principles for evaluating capital adequacy and risk:
- Capital Must Scale with Risk: Licensees must maintain sufficient real (tangible) capital proportional to the size and complexity of their operations.
- Tangible Equity Should Grow with Business: As a transmitter handles more customer funds, its tangible net worth should increase in step.
- Crypto Assets Are Generally Intangible: Unless virtual currency directly offsets customer obligations, it must be excluded from TNW.
Regulatory Significance
This guidance is important for several reasons:
- Clarity: Money transmitters now have official interpretation on how to treat crypto for capital requirements.
- Uniformity: States using the MTMA are encouraged to follow this advisory under the Act’s Broad Administrative Authority provision.
- Consumer Protection: The approach ensures that only tangible, loss-absorbing capital counts toward solvency requirements.
CSBS developed the guidance under the oversight of its Nondepository Supervisory Committee, in collaboration with the Money Transmitter Regulators Association (MTRA).
Next Steps for Money Transmitters
If your business is licensed under the MTMA, you should:
- Review your asset structure and crypto holdings
- Distinguish customer-liability-matching crypto from surplus holdings
- Recalculate tangible net worth using the guidance
- Adjust capital or restructure holdings as needed
Final Thoughts
The CSBS’s advisory is a landmark moment in harmonizing traditional financial regulation with the realities of digital asset use. It reinforces the principle that not all assets are equal when it comes to regulatory capital—and that virtual currency, while innovative, must be responsibly managed to protect customers and markets.
Staying informed and compliant in this evolving landscape is more critical than ever. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here to provide the legal counsel needed to navigate these exciting developments. If you believe we can assist, schedule a consultation here.