Google has rolled back its Play Store policy that required cryptocurrency wallet apps to hold financial service licenses, clearing the path for non-custodial wallets to remain available. Under the updated terms, only custodial wallet providers, which control user funds, must meet licensing standards, especially in over 15 regions including the U.S. and the European Union.
The Play Store change follows uproar from crypto developers and advocacy groups over potential barriers to innovation. The initial rule threatened to force even lightweight, open source wallet apps off the platform, creating compliance hurdles that many small developers cannot meet.
Legal experts like Bill Hughes from ConsenSys criticized the policy as “a bit of a mess,” noting that non-custodial wallets don’t handle user assets and shouldn’t fall under existing financial licensing norms. Under U.S. law, such wallets are considered “unhosted” and don’t require a Money Services Business (MSB) license.
In Europe, developers would have faced even more complexity. The EU’s MiCA framework would require them to register as Crypto Asset Service Providers, a near impossible task for lightweight, decentralized apps.
Industry stakeholders applauded the reversal as a win for decentralization and developer freedom. Despite the relief, many warn that the episode shows how quickly platform level decisions can override broader regulatory intentions, especially when developers lack sufficient notice or clarity.