Key Points
- Denmark is considering regulation of self-custody wallets, including Bitcoin wallets, following recent DeFi guidance by the Danish FSA.
- The proposed regulations could make offering Bitcoin wallets and DeFi interfaces in Denmark challenging.
Denmark is reportedly planning to regulate self-custodial wallets, including Bitcoin (BTC) wallets.
This is in response to recent DeFi guidance from the Danish Financial Supervisory Authority (FSA).
Concerns Over Regulation
Mikko Ohtamaa of Trading Protocol has expressed concerns over the proposed regulations.
He stated that the regulator is attempting to include all aspects of crypto in the regulation, including Bitcoin wallets.
He also suggested that the proposed regulations could affect all interfaces, including Bitcoin wallet service providers.
The Danish FSA’s move is based on a perceived gap in the EU’s Markets in Crypto Assets (MiCA) regulation.
However, these regulations do not apply to decentralized finance.
Ohtamaa criticized the DFSA, stating that if its proposal was adopted, it could make offering Bitcoin wallets in Denmark difficult.
Comparison with Other Countries
Estonia has reportedly taken a similar approach to self-custodial wallets, but the US has recently rejected this route.
In the US, claims against Coinbase Wallet were dropped in an SEC vs. Coinbase lawsuit, reinforcing a win for self-custody wallets.
Moreover, the US crypto infrastructure bill, FIT21 Act, opted to study DeFi, like MiCA, instead of regulating it.
The DFSA is currently seeking feedback from private actors on its proposed regulations.
It remains to be seen how the DFSA will revise and implement the proposals on DeFi.
If the DFSA proposal is adopted as it stands, it could negatively impact those offering self-custody Bitcoin wallet services in Denmark.