Author: Shao Jia Dian

Upon long-term observation of the cryptocurrency payment sector, one might discover an intriguing yet very realistic phenomenon: many projects in their early stages emphasize the simplicity of their structure, such as "one company, one license, one funding path." In the startup phase, this structure not only supports the business launch but often also allows for faster product rollout and lower costs, making it a common model in the early stages of the industry. However, as the business gradually scales, especially when the platform begins to serve cross-border users, integrate with banking systems, and provide services to institutional clients, this simple structure often quickly reveals its limitations.

Those cryptocurrency payment platforms that truly scale up tend to gradually develop an entirely different architecture: multiple operating entities distributed across different legal jurisdictions, supported by various types of financial or virtual asset licenses. This structure is typically referred to in the industry as "multi-license synergy."

Many people interpret "multi-license" as compliance upgrades, but from a business reality perspective, it is actually an inevitable structure after scaling.

At first glance, this seems merely to be an increase in the number of licenses held by the company, but a closer observation from the perspectives of legal structure and business logic reveals that this change is not an active pursuit of complexity by the company, but rather dictated by the regulatory structure of the global payment system itself. When business scales to a certain level, companies must confront the regulatory rules of various countries, the licensing systems for different types of financial businesses, and the compliance requirements of financial institutions simultaneously, and a single-license structure often cannot meet all these conditions at once.

In simple terms, when cryptocurrency payments begin to connect with the real financial system, structural complexity is almost inevitable.

In recent years, the Asian market has seen the emergence of several representative cryptocurrency payment platforms, such as RedotPay, Alchemy Pay, and Triple-A. These three companies differ in product form and business model, but a legal structure perspective reveals that they are all gradually forming a multi-entity, multi-jurisdiction, and multi-license operational system.

These cases illustrate one thing: the competition in PayFi has already begun to shift from product competition to structural competition.

Cryptocurrency payments are evolving from product functionality to account-based financial platforms

In the early stages of the industry, most people’s understanding of cryptocurrency payments remained at relatively simple application scenarios, such as using stablecoins for consumer payments, purchasing cryptocurrency assets with bank cards, or directly transferring digital assets within wallets. From a user experience perspective, these functions are indeed just payment tools; thus, many startup teams position their products as "payment products" or "payment gateways."

However, if we observe some rapidly growing platforms in recent years, we will find that their product structures are gradually changing. More and more cryptocurrency payment platforms are actually constructing a type of "account-based product structure."

Taking RedotPay as an example, from a user's first impression, it is easily understood as a stablecoin payment card platform. But if we look at the General Terms published on their official website, we will find that the services offered by the platform extend far beyond simple payments. Their service modules include custody accounts, payment cards, asset exchange, virtual asset lending, yield products, and fiat remittances, among others. These functions do not exist in isolation but are combined around a unified account system, allowing users to carry out various operations like asset storage, asset conversion, consumer payments, yield acquisition, and lending on the same platform.

When a platform offers payment, exchange, custody, yield, and lending services simultaneously, it becomes difficult to simply understand it as a "payment tool." From the regulators' perspective, such platforms actually possess multiple financial service attributes at the same time. This is why many payment platforms appear to be mere product innovations in the early stages, but as they scale up, they inevitably enter more complex regulatory frameworks.

The reality problems faced by a single-license structure at the scale-up stage

In practice, most cryptocurrency payment platforms adopt a relatively lightweight compliance structure during the startup phase, where a single operating entity holds a critical license as the basis for legal business operation. When the business is not of significant scale, this structure typically meets regulatory requirements while reducing compliance costs. However, once the platform begins to enter global markets, this structure often encounters several real-world challenges:

Firstly, there is the fragmentation of regulatory jurisdictions. There is no unified framework for global payment regulation; the regulatory systems of different countries or regions vary greatly. For example, the United States relies on the MSB and MTL regulatory systems for money transfer services; Europe regulates payment and cryptocurrency services through the EMI and MiCA frameworks; Singapore adopts the Major Payment Institution system; and Hong Kong has the MSO and virtual asset service provider systems. No single license can cover global payment operations. This means if a platform wants to service multiple markets, a single regional license often cannot support all its business needs.

Secondly, the expansion of product functionality brings about regulatory overlaps. As platforms expand from payments to asset exchanges, custody, yields, or lending, different businesses will touch upon different types of regulation. For example, payment services typically fall under payment institution regulation; custody and exchange services for digital assets may be under the virtual asset service provider framework in many regions; yield and lending arrangements may further involve investment management, securities, lending, or other financial regulations. As products continually expand, regulatory structures will also accumulate.

The third problem arises from financial partners. When the platform is smaller, banks or payment channels usually do not pay much attention to its regulatory structure. However, when the business begins to scale, especially when the platform wishes to issue payment cards, connect to bank clearing systems, or serve institutional clients, financial institutions typically require companies to clarify their regulatory identities. "What type of licensed entity are you?" is often an unavoidable question in all collaborative negotiations. Many cryptocurrency payment projects realize during this phase that they need to redesign their compliance structure.

Multi-license synergy is essentially a design of structure

In the industry, "multi-license" is often interpreted as a company applying for more licenses, but in practical operations, multi-license synergy often implies more complex arrangements. True multi-license synergy does not simply mean "getting a few more certificates," but rather involves segmenting the business through legal structures so that different business modules can operate under different regulatory frameworks.

From a regulatory logic standpoint, a seemingly simple cryptocurrency payment platform often involves multiple financial links in the actual business chain, such as the receipt and clearing of fiat funds, the exchange and transfer of cryptocurrency assets, custody of user assets, and merchant settlement, among others. In most jurisdictions, these functions are usually governed by different types of regulatory systems. If all businesses are managed by the same entity, it not only increases compliance risks but also makes regulatory responsibilities vague. Therefore, when platforms scale up, segmenting the businesses through structural design becomes a more sustainable practice.

From practical experience, this structure typically includes three levels.

• The first is functional layering.

Different business modules are handled by different entities or licenses. For example, payment settlement services are usually undertaken by licensed payment institutions, while asset exchange or custody services may be provided by virtual asset service providers. If a platform also involves yield or lending services, these businesses, in many instances, will be further segmented into other jurisdictional entities to ensure that each type of business operates under its corresponding regulatory framework.

• The second is regional layering.

Different markets are managed by different legal entities to adapt to local regulatory frameworks. For instance, European business is typically handled by EU-licensed entities, while Asian operations may be conducted by entities based in Singapore or Hong Kong. In cross-border payment scenarios, this arrangement allows platforms to acquire regulatory identities in different regions while avoiding regulatory conflicts between different jurisdictions.

• The third is risk layering.

Through a multi-entity structure, companies can legally isolate funding risks, compliance risks, and regulatory responsibilities. If a regulatory issue or business risk arises in a specific region, it won't directly impact the entire business system. For payment platforms involving large-scale money flows, this risk isolation is especially crucial in practice.

From a legal structure perspective, multi-license synergy is essentially a typical design for cross-border financial architecture. It does not solve the question of "how to obtain more licenses," but rather focuses on how to operate payment, exchange, custody, and settlement functions concurrently in compliance within the fragmented global regulatory system.

RedotPay: A multi-license combination for stablecoin account platforms

The most well-known product of RedotPay at the user level is the stablecoin payment card, but a careful reading of the service terms disclosed on their official website reveals that their platform structure is far more complex than a single payment product. According to their General Terms, the service modules offered by the platform include Custodian Account, RedotPay Card, Swap, Virtual Assets Loan Services, Crypto Earn, Fiat Remittance, and Crypto Transfer, among others.

More critically, these services are not provided by a single entity. The terms clarify that the Swap, Fiat Remittance, and Crypto Transfer services are offered by Red Dot Payment Inc., while Crypto Earn and some asset services are undertaken by RedotX Panama.

Regarding regulatory identities, RedotPay's structure also shows evident multi-jurisdiction features.

First in Hong Kong. RedotPay acquired a licensed Money Service Operator (MSO) in 2024 through acquisition, allowing the institution to provide currency exchange and remittance services. This means the platform already has its licensed entity for fiat exchange and remittance segments, without needing to rely entirely on third-party channels.

Secondly in the United States. Its terms indicate that Red Dot Payment Inc. is registered as a Money Services Business (MSB) with FinCEN, holding a corresponding MSB registration number. This status indicates it is included in the federal MSB/AML regulatory framework; however, if specific business interacts with state-level definitions of money transmission, it generally still needs to separately judge based on each state’s licensing requirements.

Additionally, RedotPay's structure extends into the Latin American market. Its group entity RedotX (Tango) Limited Argentine Branch is already registered in the virtual asset service provider registry of the Argentine Securities Commission (CNV), obtaining PSAV/VASP status.

When looking at this information together, the structural logic of RedotPay becomes very clear:

• Hong Kong MSO handles fiat exchange and remittance

• US MSB supports fund transfer and payment chain

• Argentinian VASP registration manages virtual asset services

• Panama entity undertakes yield modules

Different businesses → different entities → different regulatory responsibilities.

This is exactly the typical multi-license synergy structure of a stablecoin payment platform.

Alchemy Pay: The licensing puzzle of a global fiat entry network

Alchemy Pay's business positioning differs from RedotPay; it resembles a payment network connecting the traditional financial system with the cryptocurrency market. Its core products are crypto-fiat on-ramps and off-ramps, enabling users to purchase crypto assets via bank cards or bank transfers and exchange digital assets back to fiat when needed.

As this model intrinsically involves cross-border capital flows, its compliance system has had to be oriented toward multiple markets from the start.

In the US market, Alchemy Pay entered the payment system by applying for multiple state Money Transmitter Licenses (MTL). The company has already obtained MTLs in several states including Arkansas, Iowa, Minnesota, New Hampshire, New Mexico, Oklahoma, Oregon, Wyoming, Arizona, and South Carolina, and continues to expand to more states. Additionally, the company has completed its registration as a FinCEN Money Services Business (MSB).

In the UK and other markets, Alchemy Pay accesses local payment networks through payment institution licenses, registrations, or cooperative channels; its publicly disclosed regulatory touchpoints include the UK's API, multiple state MTLs in the US, Australia's DCE registration, Switzerland's VQF SRO qualification, and registration/investment layout in South Korea's electronic financial business.

In other words, Alchemy Pay's payment network is effectively built upon a global licensing puzzle.

The US is responsible for fund transfer licensing, Europe for payment institution regulation, and other regions complete supplements through virtual asset or payment registrations.

The technology platform is unified, but the payment regulatory identities are dispersed across multiple jurisdictions.

Triple-A: A global regulatory network of licensed cryptocurrency payment institutions

Triple-A's business model is more focused on the enterprise payment sector, with its main product helping merchants accept payments in cryptocurrency and settle in fiat.

In terms of regulatory structure, Triple-A adopts a typical "central + extension" model.

First, in Singapore. Triple-A holds a Major Payment Institution (MPI) license issued by the Monetary Authority of Singapore (MAS). This license allows the institution to provide various payment services, including Digital Payment Token Services, Domestic Money Transfer Services, Cross-Border Money Transfer Services, and Merchant Acquisition Services.

At the same time, the company has regulatory identities configured in Europe. For instance, its French entity has obtained ACPR Payment Institution licensing and is registered in France as a Digital Asset Service Provider (DASP). This means it possesses qualifications as both a traditional payment institution and a digital asset service provider in Europe.

In the United States, Triple-A is registered as a FinCEN MSB and holds several state Money Transmitter Licenses. Additionally, the company is registered with FINTRAC as a Foreign MSB in Canada.

When putting this information together, Triple-A's structure becomes very clear:

• Singapore MPI serves as the Asia-Pacific center

• France Payment Institution + DASP manages the European market

• US MSB + MTL enters the North American payment system

• Canada Foreign MSB supplements regulatory identity

Establishing a licensed payment institution first, then integrating cryptocurrency assets into the payment system—this is indeed the most typical development path for merchant payment platforms.

The industry rules behind the three cases

When observing RedotPay, Alchemy Pay, and Triple-A together, there is a very obvious commonality. Regardless of how different their business models are, they ultimately arrive at multi-entity, multi-jurisdiction, and multi-license structures. This is not a proactive pursuit of complexity by the companies, but rather a result dictated by the global payment regulatory system. Cross-border payments involve fund custody, asset conversions, payment settlements, and merchant collections, and these segments are usually subject to different regulatory systems in various countries. Therefore, when a platform truly enters the scale-up phase, multi-license synergy becomes almost an unavoidable outcome.

PayFi competition is shifting from products to structures

From a developmental perspective, cryptocurrency payments are entering a new phase. Early competition primarily focused on product experience, user growth, and transaction volume, but as the industry matures, the challenges companies face have changed. For instance: how to make regulatory agencies understand the business model, how to gain the willingness of banks to collaborate, and how to explain the business logic to capital markets. In this environment, true competitive advantages are no longer just about products but rather about structural capabilities. This includes: legal structure design capabilities, regulatory adaptation capabilities, and risk governance capabilities.

Conclusion

Reflecting on the development of the cryptocurrency payment industry in the past few years, one can observe a very clear trend. Many projects initially relied on simple structures for rapid launches, but as businesses move toward globalization and scaling, a single-license model often encounters bottlenecks. Multi-license synergy is not a show of compliance but an evolution of structure. What it addresses is actually a very pragmatic issue: how to operate a scaled cryptocurrency payment network within a fragmented global regulatory system. For growing PayFi projects, this is likely a must-answer question in the coming years.

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