Financial Regulation

The Risk: Money Transmitter Licensing

In most jurisdictions, any service that holds, transfers, or exchanges money on behalf of users requires a money transmitter licence (MTL) or equivalent (e.g. EMI licence in the EU, PSP licence in the UK). Aroha Protocol itself does not hold funds — but your agent might, depending on how you implement the EscrowSettlement layer.

Option A — Use a Licensed Payment Processor (Recommended)

Delegate all money movement to a licensed PSP (Stripe, Adyen, etc.). Your agent orchestrates the flow but never holds funds. This is the lowest-risk path for most production deployments.

┌─────────────┐   ArohaRequest    ┌─────────────┐
│  User Agent │ ──────────────→  │ Your Agent  │
└─────────────┘                  └──────┬──────┘
                                        │ Stripe API call
                                        ↓
                                 ┌─────────────┐
                                 │  Stripe     │  ← Licensed PSP
                                 │  (or Adyen) │    holds funds
                                 └─────────────┘
                                        │
                                        ↓ Merchant payout
                                 ┌─────────────┐
                                 │  Merchant   │
                                 └─────────────┘

Your agent never touches funds. MTL risk: LOW.

Option B — B2B Invoice Settlement (Fiat, No Escrow)

For B2B SaaS-style billing where both parties are businesses, net-30 invoice settlement avoids real-time money movement entirely. The Aroha saga records the commitment; payment happens out-of-band via ACH, SEPA, or wire.

// Agent commits to deliver, invoice is settled out-of-band
{
  "type": "ArohaCommit",
  "body": {
    "sagaId": "saga_01HV3K",
    "settlementRef": "INV-2026-0042",   // your invoice system
    "settlementMethod": "SEPA",
    "dueDate": "2026-07-31"
  }
}

Option C — EVM Escrow (High Compliance Burden)

The Aroha EVM escrow contract is available for on-chain settlement between consenting parties. Be aware of the compliance requirements before using this path.

• ⚠️Smart contract must be audited before production use
• ⚠️Stablecoin usage may trigger EMI/PSP requirements in EU (MiCA)
• ⚠️ETH/ERC-20 volatility creates accounting complexity
• ⚠️Gas fee predictability varies — budget for spikes

See the Registry Pricing page for ETH volatility mitigation strategies.

Red Lines — Never Do These

• ❌Hold user funds in a non-custodial wallet you control without an MTL
• ❌Mix user funds across sagas — each saga must have isolated escrow
• ❌Operate a stablecoin swap or exchange function without a VASPs licence
• ❌Classify EVM gas fees as a revenue item without tax advice

Jurisdiction Notes

Further Reading

• FinCEN Money Services Business definition
• EU MiCA Regulation (EUR-Lex)
• FCA Cryptoasset registration
• MAS Payment Services Act guidance