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Comment by thinkcomp | Hacker News Reader

I called it four years ago. Financial innovation is dead and money transmission laws are directly to blame.

https://thinkcomp.quora.com/In-Fifty-Days-Payments-Innovatio...

Money transmission laws are irrelevant in this case. Standard Treasury was never keeping customer cash on their balance sheet, they were enabling APIs for banks.

If you're a payments business and cash passes through your balance sheet, then transmission regs apply.

If you're moving bits, but not money, they don't.

And if you have a bank charter, or bank sponsorship, you're mostly exempt from them.

"Standard Treasury was never keeping customer cash on their balance sheet"

It's worth asking why not. I think we know...

It's also worth pointing out that they were quite relevant for Simple (your company), which ended up in a similar position.

Payments are probably more expensive than they could be (they still aren't all that expensive), but what's the problem with them being boring?

Bullcookies. Transmission laws are the cause of both the stagnation and the innovation. Innovation is literally people finding new ways around established methods.

Put a blockade up, and people will innovate around it. Engineers are not known for going gently into that good night.

And your evidence for this wild notion--that money transmission laws spur innovation--is?...

Bitcoin?

...except that A) Bitcoin doesn't get around money transmission laws, it causes large numbers of people to inadvertently violate them; B) that's why Coinbase had to completely shut down in Wyoming as I recall; and C) is anyone seriously suggesting that Satoshi Nakamoto took a look at some state money transmission statute or 18 U.S.C. § 1960 and decided to create Bitcoin as a result? If so, that would be the first time I've heard that.

This isn't Uber fighting petty city bureaucrats and taxicab owners; "disruption" in this field fucks with what it means to be a nation state, and the state will never tolerate any infringement on its right to issue and manipulate currency.

I'm not saying that innovation isn't possible -- I'm just saying that it has to come from within the establishment.

Starting from Europe is reasonable workaround:

https://www.regalii.com/blog/why-do-the-best-fintech-startup...

Not really. That article has numerous errors in it, and I'm not even counting Europe solving everything. If you have one U.S. customer you are subject to U.S. law.

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