The Danish Financial Supervisory Authority (DFSA) is taking steps to eliminate non-custodial Bitcoin (BTC) wallets as part of its updated Decentralized Finance (DeFi) guidelines.
DFSA’s new stance requires all crypto service providers (including frontend and mobile app developers) to operate under strict supervision. This aligns with the upcoming Markets in Crypto-Assets (MiCA) regulation, set to be implemented across parts of the European Union soon.
Denmark to Ban Bitcoin Wallets
We have finally reached this point.
In Denmark’s latest DeFi guidelines, regulators have gone too far: the guidelines attempt to cover all aspects of cryptocurrency regulation, including your Bitcoin wallet, using an “interface” argument. DFSA states…
pic.twitter.com/F7jFuLhNqC
— Mikko Ohtamaa (@moo9000)
June 26, 2024
With these changes, cryptocurrency exchanges and trading platforms will no longer be able to provide Bitcoin wallets, DEX interfaces, or other crypto-related services to Danish users without approval from Danish regulatory authorities.
The European Banking Authority (EBA) recently finalized the technical standards for MiCA, ensuring compliance with stringent financial requirements for EU firms. This includes equity adjustments, liquidity provisions, and strict recovery plans for cryptocurrency issuers, significantly impacting stablecoins pegged to the US dollar.
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Some market analysts argue that these new regulations are overly restrictive. Mikko Ohtamaa reported on Denmark’s related bans, suggesting MiCA rules may aim to phase out digital assets gradually, a sentiment echoed by Gary Gensler, Chairman of the U.S. Securities and Exchange Commission. Ohtamaa believes these rules could effectively ban cryptocurrencies through excessive control.
