US Congressman Warren Davidson is a strong supporter of bitcoin and its privacy functionalities. Davidson, who represents Ohio, is now trying to avoid strict cryptocurrency regulations. In a letter to Steven Mnuchin, the US Secretary of the Treasury, Davidson explains why it is a bad idea to regulate cryptocurrency strictly.
What is it about?
At the end of November the rumour came out that Steven Mnuchin wants to develop regulations around non-custodial cryptocurrency wallets. A non-custodial wallet means that you manage your own wallet.
Brian Armstrong, CEO of cryptobeurs Coinbase, expressed his concerns about possible regulation in a tweet storm at the end of November. According to Brian Armstrong it is quite possible that bitcoin and cryptocurrency in general will be regulated in the same way as in the Netherlands. That means that, as a crypto owner, you have to be able to prove that your coins really belong to you. In the Netherlands you do this by sending a screenshot of your wallet.
Privacy and freedom are crucial
The crypto community is opposed to this, and is now also gaining political support. Congressman Davidson wrote a letter to Steven Mnuchin on 9 December expressing his concerns about the possible future regulation of crypto-currency wallets.
According to Davidson, legislation such as this goes against the principles of freedom: „Because intermediaries are removed from a non-custodian cryptocurrency wallet, consumers can retain their privacy and send transactions freely. This is crucial at a time when consumers are conducting more and more finances digitally“.
Davidson goes further, making a comparison with China: „Such freedom is in stark contrast to China’s digital yuan. In China, citizens‘ transactions are monitored and transactions and activities can be censored“.
Cryptocurrency can help unbanked
Returning to cryptocurrency, Davidson believes digital assets have the future: „The trustless nature of digital assets (inherent in non-custodian wallets) has the potential to extend banking services to the ‚unbanked‘ and the ‚underbanked‘. Given the importance of this innovation, we believe that any legislative proposal should be carefully considered“.