We need to talk about Cashu regulation
The truth is that Running a Cashu mint in most parts of the world is going to bring up \[clears throat] regulatory concerns. The only question is which ones.
Are you a virtual asset service provider? A money service business? A money transmitter? An electronic money institution? A custodial wallet provider? A payment services provider? An actual, like, *bank* bank?
In the eyes of those best positioned (and most eager) to give you an answer, you're probably at least two of the above. A Cashu mint by its very nature is the regulatory embodiment of Eminem's *I am whatever you say I am* lyric. It does a little bit of every sensitive thing. A custodial wallet is amorphous enough—but a custodial wallet typically doesn't issue its *own* separate electronic money. A Cashu mint does exactly this, and to unknown depositors no less.
**Snakes and ladders**
Of course there is a ladder with rungs that run up from enthusiast tester with a Raspberry Pi, to highly-social person with a highly-social mint, to app developer with an app mint, to business with a business mint, to big business with a bunch of big business mints. And next to that ladder is the ladder of turnover, with rungs from the equivalent of $20 per month in test transactions up to tens or even hundreds of thousands.
We can all agree that for those towards the bottom rung of either ladder worrying about regulation is paranoia. Nobody's coming for your Raspberry Pi. But here's the thing—you don't have to go too many rungs up to be at a height where you do need to be thinking about the regulatory context. That thinking could be related to avoiding, cursing, or accepting that context—but it's going to be thoughts thought, nonetheless.
**Middle rungs**
For the rest of this article we'll assume you're at some middle rung. Your mint has *traction* (somehow) and enough of it, or the right type of it, or both, that you're chewing on your fingernails a little at night.
You don't have a license. You don't even have a legal entity. Are you at risk of being charged for something? Of being fined? For what? How much?
Put it this way, if you were to open an unlicensed currency-exchange booth in the strip-mall down the road you'd be shut down before you've even attached the sign—and this Cashu mint of yours is doing more volume than such a strip-mall booth ever could.
And what if some money launderers found out about your mint and one night while you were sleeping ran a jaw-dropping smurfing spree through it (look that term up). Are you now on the line for aiding and abetting money laundering, in addition to running an unlicensed money transmitting business (or whatever else)?
**Screw it, just go for it**
I'm not going to dissect the screw-it-just-go-for-it option here because there's not much to say about it. If you want to go for it then go for it. Maybe this is the moral approach in some wider view.
**Don't screw it**
But not everyone is comfortable in the shadows (which is where the screw-it option, despite its boldness, will likely take you). So if you decide that you are not in fact going to screw it then what?
Chances are you'll need a legal entity first and a license second—either one attained via normal application channels or via participation in some sort of fintech sandbox. However in many countries that will be impossible; application requirements will be unmeetable and, being a very un-startup-y mess, no fintech sandbox will take you.
And here's where the case for getting on top of the regulatory side makes sense. Because for the options from this point forward to be viable the world of Cashu will require a lot of research, and partnerships, and work with regulators around the globe, and tooling, and the creation of bespoke agencies, and much more. Better to start that now, because it'll be years before such work starts to bear fruit.
Anyway, as a fingernail-chewing mint operator here's what you'd want to do:
* Find a global jurisdiction (likely a financial center) that has a respected legal framework for crypto, and understands what Cashu is, and has a bespoke program for Cashu mints that emphasises risk-based AML that preserves (to the degree that it can) the blind nature of Cashu mints. This is likely a total of zero jurisdictions right now, but it is what you'd need.
* Do some research based on who your mint users are and where they are from (to the degree you can even know this). If you have a mint in a regulated jurisdiction then can these potential users safely access it? Can you advertise it to them? For example in some countries a business could use your mint having stumbled upon it, but if you were to promote your mint to business in those countries and in those languages then you'd need a license in those countries too. It'll certainly help if the mint is in a more respected jurisdiction (Singapore is always going to be an easier sell than Seychelles) but the more respected the jurisdiction the more the leg-work.
* Get your head around the AML requirements and figure out if the compromises they entail (threshold-based app gating, etc.) are acceptable to you or not.
* Register a legal entity in that financial center or country.
And that gets you to the starting line. But not so easily. With that in mind, here's all the someones you would have wanted doing things for you to make that path easier before you even embarked on it.
* Someone to connect with the highest-potential regulators around the world, educate them on Cashu, and sit with one or two of them for months (or even years) to craft a bespoke regulation scheme for Cashu mints operated by entities registered in the jurisdiction, preferably as part of some more forgiving sandbox program.
* Someone to run a service that'll help you get up and running in that jurisdiction as quickly an easily as possible, with a lot of educational content to help you understand the risks, the cost of pulling out, taxes, etc.
* Someone to research what using your regulated mint means to different parties in different parts of the world and help you craft disclaimers and educational content of your own.
* Someone to develop an AML platform tailored to the demands of the regulator (after the negotiation period described above), including SDKs, APIs and all the rest. (Since this is a delicate dance between anonymity and actual usefulness in terms of AML, this will take time.)
* Someone to build out a corp-tech application suite to generate all the reports and do all the other stuff you'll need for compliance on both sides (your country and the jurisdiction of the mint).
**Does this make Cashu a non-starter?**
At least for by-the-bookers? I don't think so. If you have all these someones doing all this leg-work on your behalf then what's left for you can be quite manageable. The key point, I think, is that between this route and the screw-it-just-go-for-it route there really isn't too much of a middle ground. There isn't some option where you can just let the mint grow and grow, and play the "I didn't know it was against the law" card if someone comes knocking (and then start Googling the next morning). We're way past that point in terms of crypto regulation in most countries.
**Where is the zeitgeist at?**
This article is more of a sounding board than anything. Where are people at on this? Is substantial work being done along these lines already, just not much talked about on Nostr? Or is the zeitgeist firmly on the cypherpunk side, and this is all a little taboo? Genuinely curious what Nostr thinks about Cashu regulation in 2025.
