Colorado Enacts Money Transmission Virtual Currency Regime

On August 6, 2025, Colorado's Money Transmission Modernization Act (MTMA) went into effect, establishing the state's money transmission virtual currency regime. This new framework regulates various business models related to cryptocurrency transactions.

The MTMA defines 'money transmission' as selling or issuing payment instruments, stored value, or receiving money for transmission from persons in Colorado. The law also sets forth prudential requirements for licensees, including maintaining tangible net worth, providing security through a surety bond or approved deposit, and maintaining permissible investments at least equal to outstanding money transmission obligations.

The 2018 Division guidance stated that direct consumer-to-consumer crypto transfers are not licensed money transmission. However, fiat-linked third-party flows may be subject to licensure under the Act. The MTMA also sets forth a licensing trigger where a person is in the business of buying and selling cryptocurrency for fiat currency.