Work backward from the first legitimate revenue stream, not from the cheapest certificate
First determine what fees the company will charge customers and which regulated functions it must perform itself. Assume the first batch of customers is in a certain European market and the business needs to custody and transfer stablecoins; purchasing an offshore registration unrelated to market access in that market does not solve the core problem. What should really be compared is the complete plan for carrying out this business: the required authorizations, entities and personnel, and qualified alternative partners, rather than the market prices of certificates in various jurisdictions.
A free government registration does not mean low operating costs
Official FinCEN and FINTRAC materials state that the relevant registration procedures do not charge a registration fee, but this does not mean there are no company, personnel, compliance or other licensing costs. FinCEN in the United States also makes clear that MSB registration is not an operating license. Therefore, a low quote should be further broken down: does the fee cover only filing the form, or does it also include business characterization, implementation of policies and procedures, and follow-up support? Are bank account opening, local licensing and customer protection requirements excluded from the scope of delivery? These questions are more worth asking first than "how long until the number is issued."
Cooperation models must account for responsibility and long-term costs
If custody or exchange capabilities are not to be built in-house in the first phase, consideration can be given to having qualified institutions directly undertake the relevant services. However, it is necessary to verify whether one's own actual functions also trigger regulation; one cannot retain own-brand collection of payments, unified pricing and settlement guarantees while describing oneself as a technology provider. The EU MiCA outsourcing rules also emphasize that a licensed entity cannot transfer responsibility away along with the outsourcing; control over the partner and the ability to exit should be included in the plan, rather than merely comparing interface fees.
Set a minimum scope that can operate sustainably
It is advisable to first select one customer group, one payment corridor and a limited set of currencies, and then calculate the fixed costs that must still be paid if the expected transaction volume is not reached. Assume the self-licensed plan is more expensive in the first year but has a lower unit transaction cost, while the cooperation plan requires less initial investment but has minimum commitments and exit restrictions; the comparison should be made on conservative business volume, not merely on ideal growth. When funds are insufficient to maintain the necessary team and customer protection, narrowing the business scope is more prudent than obtaining a license first and then looking for operating budget. For capabilities temporarily outsourced, it should also be clarified whether customer and transaction records can be exported if the provider is switched in the future, whose consent is required and how balances are to be migrated. Low upfront costs accompanied by dependencies that are difficult to exit should also be included in the comparison.
Recommended actions
- Prepare a list of the functions and qualifications required for the first business, and remove decorative registrations that cannot support that business.
- Calculate the first-year, ongoing operating and exit costs for the self-licensed and cooperation models respectively.
- Conduct cash-flow stress tests using conservative transaction volumes to confirm that compliance obligations can still be met if revenue targets are not achieved.
Information note: This article provides general information only and does not replace legal advice based on specific facts.
References
- Enforcement actions for failure to register — FinCEN
- Register your MSB or FMSB — FINTRAC
- FinCEN alert on registration scams — FinCEN
- MiCA Article 73 — Outsourcing — ESMA
