Global FinTech Licensing: Trends, Jurisdictions, and Outlook

The importance of licensing in the FinTech industry has grown significantly over the past three years. The trend gained momentum in 2022 as regulators tightened oversight following a wave of high-profile collapses in the crypto market. At the same time, users began demanding greater security — making regulatory licensing a competitive edge for providers of innovative financial services. 

In 2023, three-quarters of jurisdictions assessed by the Financial Action Task Force (FATF) were found to be either non-compliant or only partially compliant with standards for regulating virtual assets. By mid-2024, 87% of countries surveyed by FATF required licensing or registration for virtual asset service providers. 

As a result regulatory licensing has become a prerequisite for FinTech companies operating internationally or competing effectively in local markets by 2025.

FinTech Licensing: Core Categories Explained 

The FinTech ecosystem comprises a range of license types that define the scope of a company’s operations. The most widely recognized categories and their functions include:

1. Electronic Money Institution (EMI) authorizes the issuance of electronic money and the provision of related payment services, such as creating e-wallets and storing digital assets on behalf of customers. These licenses are especially popular among neobanks, FinTech platforms, and digital wallet providers.
2. Payment Institution (PI) allows companies to offer specific payment services. Unlike EMI licenses, PI holders cannot issue electronic money or hold customer funds. All transactions are processed using client money held in accounts with other institutions. Firms typically use these licenses focused on payment processing, money transfers, and card issuance.
3. Virtual Asset Service Provider (VASP) enables companies to provide services involving virtual assets, including cryptocurrencies. Crypto exchanges, custodial wallets, trading platforms, and other digital asset providers commonly hold VASP licenses.
4. Money Service Business (MSB) applies to non-bank entities offering traditional financial services such as money transfers or currency exchange.

These represent the most common FinTech license types, though specific names and requirements vary by jurisdiction and regulator. Other specialized licenses may also be required for activities such as crowdfunding, peer-to-peer lending, tokenization, asset custody, digital banking, and more.

The Most Popular Jurisdictions for FinTech Licensing 

When selecting a country for FinTech licensing, companies must weigh a range of factors, including the cost, speed, and transparency of the process, regulator support, capital requirements, local presence obligations, and the potential to scale into other markets.

Some of the most FinTech-friendly jurisdictions include:

1. Lithuania. Licensing for electronic money issuers, payment service providers, crypto businesses, and crowdfunding platforms is offered. The typical licensing timeline is 6–9 months. A Lithuanian license grants access to European Union markets. 
2. Estonia. Issues licenses for cryptocurrency service providers. In 2022, the country tightened its licensing regime, requiring strict regulatory compliance. Processing takes around 6 months and provides access to the EU market.
3. Singapore. Regulates a wide range of payment and crypto services. Licensing can take 9–12 months or longer. The jurisdiction enjoys a strong reputation and a high level of trust across Asia and globally.
4. UAE. Licenses money transfers, crypto services, and other FinTech solutions. The process typically takes 3–6 months. Several special economic zones offer more flexible licensing terms. Local licenses enable access to the Middle East and North Africa (MENA) markets.
5. Hong Kong. Offers licenses for crypto exchanges, custodial services, and digital wallet operators. Licensing takes up to 12 months. The jurisdiction provides strong access to Asian markets and is known for its robust regulatory standards.
6. United Kingdom. Regulates electronic money issuance, payment operations, and digital asset-related services. Licensing takes 6–12 months. The UK maintains high regulatory standards, and its licenses are widely recognized across global markets.
7. Canada. Provides federal-level registration for money transfers, foreign exchange, and crypto transactions. Registration takes 2–6 months, though additional licenses may be required for operations in individual provinces. Canada serves as a strong entry point to the North American market.

Many more jurisdictions offer FinTech licensing than those listed above. However, the ones mentioned stand out for the transparency of their application processes and their proactive, structured approach to regulating the FinTech sector as a whole. They also adhere to key international financial standards, making them attractive options for both global and regional players.

Licensing has recently evolved from a routine operational step into a strategic cornerstone of FinTech brand development. As regulators tighten global coordination, market players are forced to think internationally — building unified models for compliance and risk management that satisfy the requirements of multiple jurisdictions. A well-chosen and timely license opens doors to new markets, and creates long-term competitive advantage through enhanced trust among clients, partners, and investors.