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Re: [Taler] USA regulatory thread part 1

From: Jeff Burdges
Subject: Re: [Taler] USA regulatory thread part 1
Date: Mon, 05 Dec 2016 01:11:09 +0100

On Sun, 2016-12-04 at 12:47 -0800, Ryan Stewart wrote:
> On 12/04/2016 09:41 AM, Jeff Burdges wrote:
> > There are however several more limited approaches from which one could
> > build up the business that allow starting out with less regulatory
> > overhead, albeit with less functionality.
> >
> > (1) There are good odds these state licenses apply only to one side of
> > the transaction, probably the customer[exchange] side since the state's has 
> > a
> > strong interest in the solvency of the financial institutions its
> > residents use. 

> Yes, the legal requirements lie on the exchange operator's side only. 
You miss understood me.  

A merchant being paid with Taler is NOT a "customer" of the exchange in
the way that Taler developers, and cryptographers, use the term.  And
not in any legal sense either I suspect.

Just as a refresher:

A Taler transaction consists of two steps involving three parties, a
customer who supplies funds, an exchange that facilitates the
transaction, and a merchant who receives the funds. 

Step 1 (customer pays exchange)

A customer transfers money to their account with a Taler exchange using
an SEPA/ACH transfer.  And their wallet withdraws this amount in Taler

Step 2 (exchange pays merchant)

A customer makes a purchase with a Taler merchant by singing over some
tokens in a deposit permission.  The merchant send the deposit
permission to the Taler exchange, who transfers the money to the
merchant using SEPA/ACH.

There is no business relationship between the Taler exchange and the
merchant outside of this *one* transaction, although the exchange may
impose minimums.  The merchant merely needs to be able to correctly
specify their SEPA/ACH transfer details to which the exchange can
transfer money.  

In principle, you could even use Taler to pay a merchant who does not
know about Taler.  You must run the merchant software for them, and they
might not know why they are getting ACH payments, but it'll send them
money just fine.

There are like 8000 credit unions in the U.S., and who knows how many
small banks, any of which can make an ACH payment to an account in CA on
behalf of one of their customers.  Afaik these institutions have mostly
not registered with anyone in CA, much less took out those enormous
bonds, although obviously the ACH receiving bank has done so. 

Now all these smaller institutions do ensure that they interact with
their customers using *only* the laws of their home state, occasionally
even requiring a proof of residency.  A MO based Taler exchange can
require customers do what MO based credit unions require, or even
require they become members of a particular MO based credit union.  

I suspect you've found that running a nation wide bank or transaction
system is hard because consumer financial regulations were traditionally
state level.  

Taler is designed so that it should not need to be nation wide though.
If just one bank or credit union in each state runs a Taler exchange,
then anyone in the U.S. can open an account that can make Taler
payments, probably to anyone else.  

As an exchange operator, it limits your growth potential if you can only
accept customers from one state of course, but your customers should
still be able to pay any merchant who provides ACH deposit details.


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