This is what gpt says: • Users can pay each other inside the system, but the system doesn’t let you take that “money” out into the real banking world or convert it to another currency. • Since nothing leaves the bubble, regulators usually don’t consider it “money transmission” (which is legally when you take money from one person and deliver it to another, like Western Union). 2. BTCPayServer + VPN example • If you run BTCPayServer to accept Bitcoin for your VPN service, the Bitcoin goes directly from the customer’s wallet to your wallet. • You never hold customer funds on their behalf. You’re just accepting payment for your own goods/services. • That’s not “money transmission” either — it’s just you getting paid. 3. The core point Both cases avoid money transmission risk because: • Closed e-cash: no external transfers, it all stays inside. • BTCPayServer merchant setup: no custody, just direct payment. So the line is basically saying: 👉 Regulators care when you custody or move money for other people. If the system is closed (like arcade tokens) or direct (like BTCPay), you’re in the clear.