This use case would require regulatory cover in most places.
Discussion
How so?
We’ve talked to a few regulators in Asia about that very model specifically.
The crux is that it’s not generally seen as a closed system.
A BTC Pay server doesn't hold funds or issue tokens. It just automates the process of generating invoices and verifying that a payment has been made to the merchant's wallet (or whatever).
A Cashu mint though is a tokenised credit system, which most regulators see differently.
For example if you're a merchant and you issue gift certificates then as long as they can't be exchanged for cash (either outright or by giving change in any serious amount relative to the gift certificate's value) then you're good to go in most places. But for Cashu the holder can cash out anytime, either remaining value after a purchase, in any amount, or they can cash out the top up without purchasing, etc. So it's open and exchangeable.
In some countries that's a grey area, but in others it's pretty clear that this is a regulated use case.
If looking for Cashu entry points that are less likely to require regulatory green-lighting then I think there are better ones than this, again though depending on the country.
In the example I've made, they can't cash out but just pay back.
Which entry point do you suggest looking into?
Employee-facing use cases for businesses, such as small-expense reimbursement (think of a Cashu-powered Expensify) and other things like internal employee rewards programs. We're actually going through a VC accelerator out here right now to try and get funded for a Cashu + these types of use cases pitch, so fingers crossed. (We're in the "VCs can be good people too" camp.)
These use cases are generally much easier via a vis regulation, as the employer-to-employee payment relationship is a whole different thing from the regulator's point of view.
Ah right. Though “pay back" and "cash out" would be seen as the same thing I feel.
The only path to argue that I can see is to argue that Cashu tokens represent a form of gift certificate. But gift certificates are supposed to be non-monetary, limited-purpose instruments. Depending on the country, customers can sometimes get a refund on higher-value gift certificates, often on condition that they ID themselves and jump through a lot of other mandated hoops. But for smaller gift certificates the merchant is not allowed to refund. And when it comes to giving change, usually the customer can't get back any change except if it's a small amount in view of the original value of the gift certificate. So they’ll just add a pair of socks or whatever to use up the remaining amount.
What you’re suggesting might work if you *must* spend *all* your tokens at that merchant (once obtained there is no way back to the lightning network for your tokens drawn on their mint). But then besides some of the niftier programmatic aspects of Cashu you lose a lot of the value and it becomes something like a virtual in-game currency. Cashu could still be a good backend for only that though, which goes to show just how versatile it is.