Digibyte Foundation Hans Koning Demystifies Self-Custody Wallets and RegulationDecember 22, 2020
Hans Koning, Chairman of Digibyte Foundation published a news content “Is the US Treasury Trying to Backstab Crypto?”
The crux of the facts explored in the content are as follows: There are rumors about the U.S. Treasury and Secretary Mnuchin planning to rush out regulation self-hosted crypto wallets.
For clarity, self-hosted crypto wallets are wallets provided by software or apps, which allows individuals to store their own cryptocurrency. Thus, they need not depend upon third party financial institutions to store their crypto. Self-hosted crypto wallets are known as non-custodial wallets as they are not under the control of any third party institution. They are also known as self-custody wallets as these wallets permits the individuals to store their own cryptocurrency and therefore the individuals have custody of their crypto.
If the regulation process becomes a reality, financial institutions will be verifying the owner of the self-hosted wallets if they need to complete the transactions. Thus, every non-custodial wallet will have to facilitate the information required to ensure KYC norms. This is catastrophic to the idea of decentralized privacy.
Governance in blockchain technology is not really between people, but it is between smart contracts and computers. There is no human interaction component in the process, which is considered very important to establish a trustless system.
The fact that drives lot of people to cryptocurrency is the idea of trustless and reliability. The middlemen and intermediaries are eliminated, thus creating an open environment where two parties can interact with each other freely. Parties from across the world are able to connect with each other and the world becomes literally borderless.
When the decentralized nature of the blockchain is preserved and the financial industry is added in the mix this can lead to DeFi. This can mean a very goodbye to banks. Thus, governments and treasurers sure do not want this to happen.
Financial empowerment comes when we have the freedom to control our own finances. The potential for financial empowerment is strong when individuals are able to have their own self-hosted crypto wallets. Banks who claim to be customer centric expect the customers to trust them, but they do not reciprocate the trust.
Commenting on this, Sydney Ifergan, the crypto expert tweeted: “Hans Koning, Chairman of Digibyte Foundation points to how Regulators are dreading crypto as a threat to their existence and they are narrowing down to self-hosted crypto wallets. True”
The banks and regulators do not want a whole generation to be able to skip the idea of being reliant on banks and to simply have their own crypto wallets which they can use at different of sale.