Congresspeople tell Treasury to back off of rumored self-hosted wallet ban

Congressman Davidson, in particular, sees potential Treasury action as a bad idea for everybody involved.

Photo: Cointelegraph

Several members of Congress have voiced opposition to a rumored blockade on self-hosted crypto wallets in the works at the U.S. Treasury.

In a Dec 9 letter addressed to Treasury Secretary Mnuchin, four members of the Congressional Blockchain Caucus wanted answers for rumored Treasury rulemaking that would restrict self-hosted wallet usage in the U.S.

The authors, Warren Davidson, Tom Emmer, Ted Budd and Scott Perry, argue that such limitations, "Would hinder American leadership and preclude meaningful participation in the technological innovation currently underway throughout the global financial system."

Speaking to Cointelegraph, Davidson noted that Treasury rulemaking is likely more dangerous than last week's STABLE Act, that seeks to lock down on independent operators of stablecoins. The Ohian congressman said: “Mnuchin actually has a lot of power to make policy through rulemaking, so that’s actually more pressing.” 

Davidson continued to argue in favor of the benefits of self-hosting and P2P, “The real issue is, self-hosted wallets are useful for all sorts of potential blockchain applications. So the ability to move a token without an intermediary is an essential element of true blockchain. If you look at a frictionless system, part of the Bitcoin whitepaper that made blockchain famous and growing as a technology is the ability to do something peer-to-peer. It’s a core tenet of the technology.”

Today's letter argues that crypto technology is actually helpful for law enforcement looking to trace illicit usage, "Such a regulation could actually undermine the Treasury Department from stopping illicit actors from exploiting the financial system, both within the traditional banking system and the digital asset ecosystem."

In addition to defending the technology behind self-hosting wallets, today's letter simply asks the Treasury to publicize its plans, which have remained rumor. 

The crypto industry initially launched a defense of self-hosted wallets and peer-to-peer crypto transactions at the end of November. 

Earlier today, several of the same congresspeople signed a separate letter to the Securities and Exchange Commission. In that letter, they asked for more clarity for security token custody.

Reprinted from Cointelegraph, the copyright all reserved by the original author.