Co-founder of Coinbase, Brian Armstrong, is distressed that US Treasury and Secretary Mnuchin may set forth new regulations on self-hosted cryptocurrency wallets. Brian took his worries to Twitter on Wednesday evening to blast the rumored gameplan, which will see non-custodial wallets being tracked. If the rumors are true, the CEO of Coinbase is afraid that the regulations will bring forth adverse reactions.
Quite several Crypto services use self-hosted crypto wallets, DeFi smart contracts, and software wallets. All would require some identification or clearance to transact with regulated companies under the alleged regulation. Self-hosted crypto wallets allow account holders to store a cryptocurrency’s private keys and give the users full control over their funds. Possession of private keys assures that you wholly own bitcoin or several cryptocurrencies in existence.
It is challenging to gain identifying information on recipients in the crypto market. A good example is smart contracts, which are not automatically owned by a particular individual or business, thus not easily identifiable. The recipient is different without a direct counterpart in traditional financial services. Many users value their financial privacy and might be skeptical about uploading their personal information on various platforms. It is impractical for customers to verify a business identity before they can transact.
Further, it will be almost impossible to collect relevant information since some customers are in remote places, some without permanent addresses or ID. Some of the hardware wallets that could be affected by the rumored ban include Trezor and Ledger.
Impact of the Wallets Ban
Regulating the growing crypto industry will lead to the termination of emerging cryptos. Additionally, the ban could see a fall in crypto transactions to non-custodial wallets. The regulation could also shepherd the US being cut off from crypto innovations in the globe. Further, American consumers will be forced to seek foreign unregulated crypto companies, which will affect the US economy negatively.
It is still unclear if the Mnuchin initiative will succeed if set in motion since it is a strenuous project. The initiative remains shrouded in uncertainty for now. Mnuchin and President Trump have been pessimistic about cryptocurrencies; thus, this rumor does not surprise many. It is uncertain if they could see the project to the end if they issue it as it is believed they don’t have much time. Some people are speculating that this is just political propaganda after President Trump’s loss of the election. Armstrong suggests the US government should support and approve the crypto market’s thriving in this new crypto era.