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The Money Transmission Modernization Act (MTMA) is a model law written by the Conference of State Bank Supervisors (CSBS) to replace the patchwork of state money transmission laws with common standards. According to CSBS, 31 states have enacted it in full or in part as of September 2026, and money transmitters licensed in at least one adopting state account for 99% of reported money transmission activity in the United States.
For licensees and applicants, the MTMA means more consistent requirements for net worth, surety bonds and permissible investments, a common approach to change of control, and closer coordination between states. It does not create a single national licence: a money transmitter still needs a licence in each state where one is required, applied for through the Nationwide Multistate Licensing System (NMLS).
Before the MTMA, each state set its own rules. Net worth requirements ranged from fixed amounts to formulas; surety bonds varied widely; and permissible investments, the assets a licensee must hold to cover outstanding money transmission obligations, were defined differently from state to state. A firm licensed in 40 states could face 40 versions of the same requirement, and examinations were harder to coordinate.
CSBS finalised the model law in 2021 after working with state regulators and industry. Its aim is that a licensee meeting the MTMA standard in one state meets it in the others, with multistate examinations relying on common rules.
The MTMA also supports the CSBS One Company, One Exam program, under which states coordinate a single examination of a multistate licensee rather than each examining it separately. Common rules make that coordination easier and reduce the time licensees spend on overlapping reviews.
| Area | MTMA approach |
|---|---|
| Net worth | A tiered requirement based on total assets, with a minimum and a cap |
| Surety bond | Based on the licensee's money transmission volume in the state, with a minimum and a cap |
| Permissible investments | Equal to outstanding money transmission obligations at all times, with a defined list of eligible assets |
| Change of control | Prior approval for acquisitions of control, with a common threshold |
| Examinations | Coordination through multistate examinations |
| Reporting | Common reporting, including through NMLS |
The exact figures depend on each state's enactment. Some states adopted the model law in full; others adopted parts of it or amended figures. Licensees should check the version in each state rather than assume the model text applies.
Permissible investments are the assets a money transmitter must hold to cover its outstanding money transmission obligations, the money it owes customers who have sent funds that have not yet been paid out. Under the MTMA, a licensee must hold permissible investments with a market value at least equal to its outstanding obligations at all times, and those investments are held in trust for customers if the licensee becomes insolvent.
The model law lists eligible assets, including cash, certificates of deposit, certain receivables from authorised delegates, US government securities and some money market funds, with limits on some categories. Getting this right is a daily treasury task, not an annual calculation: a licensee that falls short on a busy day is out of compliance. Crypto businesses have to consider whether the virtual currency they owe customers must be covered by like-kind assets, which state laws and CSBS guidance address.
The MTMA requires prior approval before a person acquires control of a licensee, with a common threshold for when control is presumed. The acquirer files through NMLS with information on the people and entities involved, and the regulator reviews it before the transaction completes. In MTMA states the process is more consistent, but each state still decides, and a transaction can be held up by one slow state. Investors in fintechs with money transmitter licences should build the approval timetable into the deal, and companies raising funds should check whether a new investor's stake crosses the threshold.
CSBS keeps a list of state enactments and an adoption map on its website. As of its September 2026 update, 31 states had enacted the MTMA in full or in part. Adoption accelerated from 2023, with large states such as Texas, Illinois and Massachusetts among those that have adopted it, and several more passing laws in 2025 and 2026, including Louisiana and Colorado. Effective dates vary, and some states phase in particular provisions.
States that have not adopted the MTMA continue to apply their own laws. New York, for example, operates its own money transmission regime, and California applies its Money Transmission Act alongside the separate Digital Financial Assets Law for crypto businesses. A national licensing plan therefore needs to treat MTMA states as a group and the remaining states individually.
Because states adopted different versions and interpret provisions differently, examiners and home-office supervisors have not always applied the MTMA consistently. CSBS has responded with a formal process for requesting unified implementation guidance. Firms and regulators can submit questions through an intake form; not every request leads to guidance. Published guidance so far covers the treatment of virtual currency in tangible net worth, right-of-use leases and the tangibility of stablecoins.
For crypto businesses, the guidance on virtual currency and stablecoins matters, because it affects whether digital assets count towards net worth and how they are treated for permissible investments.
Licensees with questions about how a provision applies in a particular state should raise them with that state's regulator first, and consider whether a guidance request to CSBS would help the wider industry. Keep a record of the answers received, because examiners in other states may take a different view, and a documented position from one regulator is useful evidence in a later examination.
Under the model law, net worth rises with the size of the licensee, measured by total assets, between a floor and a cap. Surety bonds scale with the money transmission volume in the state, again between a minimum and a maximum. For a new applicant, the floors decide the initial capital and bond cost; for an established licensee, the scaling provisions decide how requirements grow. A firm licensed in many MTMA states still holds a bond in each, so bonding cost is a real line in the budget.
Tangible net worth excludes intangible assets such as goodwill, which matters for acquisitive groups and for businesses whose balance sheets are mainly software and brand value. Plan the capital structure so that tangible net worth comfortably exceeds each state's requirement, with a buffer for growth and for the exclusions regulators apply.
For a new applicant, the MTMA makes a multistate licensing plan more predictable. Capital, bond and permissible investment planning can be modelled once and adjusted for exceptions. The application itself still runs state by state through NMLS, with each state reviewing the file and the people behind it. Typical timelines remain several months per state, longer in states with heavy queues.
Applicants should plan around three questions: which states are needed at launch, which are MTMA states, and which require a separate approach. Our US money transmitter licence guide covers the process, and our FinCEN MSB registration page covers the federal registration that comes first.
| Stage | Typical activity |
|---|---|
| Months 0 to 2 | Business model analysis, state-by-state licensing map, FinCEN registration, policies and AML program |
| Months 2 to 4 | NMLS company record, first state applications, bonds and financial statements |
| Months 4 to 12 | State reviews and questions, examinations of the file, first approvals |
| Months 12 onwards | Remaining states, renewals, call reports and the first examinations |
Many firms launch in a limited group of states, or through a licensed partner, while applications proceed. The MTMA makes the requirements more predictable, but the work and the waiting remain significant, so the plan needs a realistic budget for capital, bonds and time.
For businesses that hold or transmit virtual currency for customers, state licensing remains the main route in most states, alongside FinCEN registration. Some states have separate regimes: New York's BitLicense and California's Digital Financial Assets Law are the best known. The GENIUS Act adds a federal framework for payment stablecoin issuers from 18 January 2027, but does not replace state money transmitter licensing for exchanges and wallets. CSBS guidance on how virtual currency and stablecoins are treated in net worth affects how much capital a crypto licensee must hold, so check the current guidance when planning.
We prepare state money transmitter applications through NMLS, build the capital, bond and permissible investment plan across MTMA and non-MTMA states, and support licensees through renewals, change of control filings and examinations. For non-US firms, we plan the sequence from FinCEN registration to the first state licences.
CSBS reports 31 states had enacted it in full or in part as of September 2026.
No. A licence is still needed in each state that requires one, applied for through NMLS.
Mainly net worth, surety bonds and permissible investments, with common approaches to change of control, examinations and reporting.
New York runs its own money transmission regime. Firms should check the current position with the New York Department of Financial Services.
Yes. CSBS runs a process for unified implementation guidance; topics published include virtual currency in net worth and stablecoin tangibility.
Not always. Some states adopted parts of the model law or changed figures, so each state's version should be checked.
Get in touch: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or [email protected].
This article is general information, not legal advice. Requirements change, and the regulator’s own publications take precedence.
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