New FinCEN ruling allows Bitcoin at marijuana dispensaries
Marijuana has been legalized in Colorado and Washington state for recreational purposes, as well as eighteen other states and the district of Columbia for medicinal use. But since marijuana remains illegal under federal law, many appropriately licensed marijuana dispensaries have had to deal in cash only due to financial services providers, from banks to credit cards to Bitcoin payment processors are being extra cautious in regards to dispensary accounts.
The U.S. Financial Crimes Enforcement Network (FinCEN) has issued new rules on Friday regarding the legal status of marijuana dispensaries which states that banks are allowed to provide financial services to these legally peculiar businesses in states where the drug has been legalized. FinCEN’s memo listed eight important priorities where financial services companies must conduct due diligence:
- Preventing the distribution of marijuana to minors;
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
- Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
- Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
- Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
- Preventing marijuana possession or use on federal property.
Coinbase had previously declined to work with marijuana merchants and even dropped a client after discovering that they are dealing in legal marijuana. With the new legislation, Coinbase seems to be adjusting its position and responded, “we are reviewing FinCEN’s updated guidance and our policy on this subject.” BitPay on the other hand is rather firm on their stand with their statement, “the Merchant Terms of Use for BitPay specify that all businesses must adhere to U.S. federal law, and marijuana is an item that is prohibited to sell nationally.”
