Joe on Nostr: The mint part is not so simple. Small scale, no worries. Moderate scale, many ...

The mint part is not so simple. Small scale, no worries. Moderate scale, many worries.

First of all it may be illegal to run an unlicensed Cashu mint operating at even moderate scale in many countries. At small scale (groups of a few friends or family members) probably fine, grey area and all. But the mint starts doing any volume in these countries and then no.

This is because of what a mint is to these countries—basically a digital bank, with deposits like a bank, withdrawals like a bank, potential to fail like a bank. In regulatory terms this is very different to running a personal LN node, even with the same volume, or smaller.

In the EU a Cashu mint might come under MiCA, and some larger community mints might become de-facto VASPs under MiCA. (The VASP categorisation doesn't actually take volume into account, rather the nature of the service, what the mint is doing, how businesslike the whole operation is, etc.) If I was an EU citizen then I'd never allow myself to become the head of a Nostr community with a busy mint that ran on my server, regardless of what the community was about.

Regardless, all it may take is one or two larger community mints rugging the community for these regulations to suddenly become more in play. Also community mints would be very vulnerable to smurfing, which is a type of money laundering vector where agents will make many small transactions through a mint; if a community suspects its mint has become a smurfing vector, what is it even to do to? It gets messy fast.

Obtaining the license could be faster and cheaper in a jurisdiction like Estonia, Malta, etc. but that will require an entity in that jurisdiction. It'll also mean AML and CTF obligations, which are tricky in a Cashu context.

This is not a popular topic here, but it is what it is.

Throw in selling Sats for euros or dollars (a whole other type of license) and the community owner is going to be putting themselves at a higher degree of risk in these countries. Not to mention how to collect payment? PayPal won't allow it, Wise won't allow it, Venmo won't allow it (underneath Visa and Mastercard won't allow it), so how is the person buying the Sats to pay the seller in a way that is compliant? (Apps like Peach try to tiptoe around this but Peach won't scale, and anyway average commission on peer to peer Sat purchases there is like 20%, due to sellers wanting to be compensated for the risk.) So basically the community would always be under the table—if not in one context then in another.

Again all of this depends on the country—the country of the mint itself, and of the users of the mint.

Anyway zooming out these are scale concerns for which Nostr is pretty far right now, and also stress testing the idea (for our own use case). TLDR small-scale casual community mints I think are a good idea, but only for close-knit groups of people who already have their Sats in hand.