The rumors regarding the U.S. regulation of private, self-hosted crypto wallets have garnered significant attention of the several known players in the cryptocurrency industry. The latest one to comment on the potential crypto wallet regulation was the Chairman and CEO of Circle, Jeremy Allaire who penned down a letter to the Senior Staff of the US Treasury Department.
China has been at the forefront of blockchain technology development to an extent where several e-commerce platforms have started accepting the country’s native Digital Yuan. Juxtaposed against weakening U.S Dollar and the country’s lack of gloomy regulatory clarity has only added woes to the cryptocurrency space and several market players in the region.
On a similar note, Allaire emphasized the innovations surrounding the development of public blockchains which have created some very significant technological advancements in recent history. The exec weighed in,
“While I am not privy to what is directly being considered, I am aware of the fact that the administration, including Treasury FinCEN, is working towards new rule-making that would effectively attempt to “plug a hole” by significantly constraining how financial intermediaries can interact with public blockchain networks, via so-called unhosted or self-hosted wallets.”
Jeremy Allaire went on to assert that he believes the proposal would “inadequately address the actual risks” that are at hand. This, in turn, would substantially harm industry and American competitiveness would continue to yield economic and industry advantage to Chinese firms which would have significant unintended consequences around the broader use-cases for this technology.
He went on to say that the kinds of approaches that he evidently heard being discussed by the authorities would be similar to “taking a sledgehammer to a problem that needs precision tools” and could considerably dampen the potential of public blockchains to transform many revolutionize.
Notably, Jeremy Allaire is not the only one to urge Treasury Secretary to rethink the rumored crypto wallet regulations. Several US lawmakers have expressed concern regarding the same in a letter to Secretary Steven Mnuchin.
The four lawmakers namely, Reps. Warren Davidson [R-Ohio], Tom Emmer [R-Minn.], Ted Budd [R-N.C.] and Scott Perry [R-Penn.], asserted that the proposed requirement for crypto exchanges to maintain KYC data could threaten user privacy. They further urged Mnuchin to urge to rethink the regulation and also consult with Congress before moving forward.