In a significant policy reversal, Google has clarified that its updated regulations for cryptocurrency wallet apps on the Google Play Store will not apply to non-custodial wallets. The company initially announced requirements for all crypto wallet developers in over 15 jurisdictions, including the United States, European Union, United Kingdom, and Canada, to obtain government licenses such as FinCEN registrations and MiCA licenses. This caused concern among developers and users fearing severe restrictions on non-custodial wallets, which allow users to retain control of their private keys.
The updated policy, set to take effect on October 29, 2025, demands that custodial wallet providers—those that hold users’ funds—comply with licensing, anti-money laundering (AML), counter-terrorist financing (CTF), and Know Your Customer (KYC) regulations. However, following strong backlash from the crypto community and developers, Google issued a formal clarification in early August stating that non-custodial wallets are exempt from these requirements and will remain available on the Play Store.
Non-custodial wallets differ fundamentally from custodial ones in that the former do not hold or control user assets and therefore do not fall under traditional regulatory frameworks for money transmitter licenses. Industry advocates pointed to FinCEN’s 2019 guidance that similarly exempts non-custodial wallets from such licensing obligations. Google’s policy reversal aligns with this regulatory precedent, allowing innovation in decentralized wallet technology to continue without excessive regulatory burdens.
Pressure from the crypto sector highlighted the potential for the initial policy to stifle innovation and remove vital tools from users, especially as many small developers lack the resources to obtain complex licenses. The policy clarification preserves access to decentralized financial tools on Google’s platform while maintaining regulatory oversight of custodial wallets that handle user funds.
Google’s balancing act demonstrates the influence of community advocacy in shaping tech giants’ approaches to emerging financial technologies. As the October rollout approaches, custodial wallets will face heightened scrutiny, but users of non-custodial wallets can expect uninterrupted service and app availability.
