Non-custodial wallets are applications that give users access to private keys. The latter are needed to conduct transactions and any operations with cryptocurrencies. It is usually a so-called Sid- or mnemonic phrase of 12, 18 or 24 words. As long as it's secure, an investor can worry about nothing and consider themselves a full-fledged owner of crypto assets.

On the eve, Russian bankers started talking about the prospects of combating non-custodial wallets. We are talking about the Association of Banks of Russia, whose representatives proposed to introduce criminal liability for coins in such accounts. Read more about it in a separate article.

Will cryptocurrencies be banned?

According to Uherick, the answer to this question is unequivocal, as such radical measures are unlikely to ever be implemented. Here is his quote on the matter, published by news outlet Cointelegraph, in which he shares his perspective on what is happening

It is very unlikely that all countries will ban non-custodial wallets or any other aspect of the Bitcoin peer-to-peer network.

As a reminder, peer-to-peer or decentralised networks are those with no central unified authority. The concept is based on peer-to-peer, whereby the client most often also acts as a server.

Stepan Uherik, CFO of SatoshiLabs

Potential attempts to ban such platforms would likely be similar to how some countries have banned the likes of crypto or torrents in the past. The expert continues.

The adoption of these technologies has not stopped. In a sense, attempts by governments to ban certain things are good marketing for them.

As a reminder, non-custodial cryptocurrency wallets are designed to give the user full control over the cryptocurrencies they own. This is done through the ownership of private keys from a specific blockchain address, which allows the user to dispose of the cryptocurrencies on it. Unlike custodial wallets, they eliminate the need to rely on a third party to freeze or confiscate the user’s crypto assets. Centralised platforms are fully capable of resorting to such measures if required by legislation or relevant authorities.

The best non-custodial crypto wallets

As non-custodial wallets essentially allow users to "be their own bank", many financial regulators and banking institutions have become concerned about the potential risks associated with such instruments. Naturally, the traditional economic system is not happy with this, as they have no control over what happens to ordinary people's digital assets.

According to SatoshiLabs’ CFO, governments have several ways to limit the use of non-custodial wallets, but an outright ban is unlikely to be achieved. We’re talking about removing wallets from popular app shops like Google Play or the App Store. This will really hamper some novice users, although more advanced crypto-enthusiasts will always find a way to work with individual crypto-wallets.

Fortunately, this week will be remembered for more than just negative news. The day before, a crypto-enthusiast under the pseudonym Mr. ERB shared his success in investing, whose story is truly inspiring. He first became interested in Bitcoin in the summer of 2017 – and has since started buying the cryptocurrency every month, counting on predictions that it will one day rise in value to as much as a million dollars. Here’s his rejoinder, cited by Cointelegraph.

That’s when I realised I wasn’t too late. I saw Bitcoin as a great opportunity to reach ‘early retirement’ and bought my first coins in October 2017.

Comparing the profitability of Bitcoin and the S&P500 stock index

ERB developed a retirement plan using Bitcoin. He set a goal of saving €1 million by buying €500 worth of cryptocurrency once a month. Five years later, the crypto-enthusiast has reported some serious success.

I don’t think I could have made that kind of profit with any other strategy. Not to mention that Bitcoin’s accumulation strategy is extremely simple and does not require active investment management. You buy, hold the coins and then keep buying more.

Bitcoin price (green) compared to euro savings (orange) and the amount of money invested so far (dotted line)

An investor has learned valuable lessons during his investment journey. Now Bitcoin has become the foundation of his worldview.

My world view before Bitcoin was pretty narrow. Life looked like this: school, work, retirement, death. Now I think somewhat differently. The ultimate goal now can be better described as entrepreneurship and one’s own sovereignty.

So in the end, the investor wants to achieve financial independence and freedom. And since bitcoins on the same non-custodial wallets cannot be withdrawn, such a state can indeed be considered freedom.

Cryptocurrency investor


We believe that fighting non-custodial wallets is really going nowhere. Firstly, it will be possible to find the installation file on the Internet in any conditions. Secondly, even in case of blocking certain regions by representatives of cryptoprojects - as it happened to MetaMask and Venezuelans - a VPN will always allow to bypass the restriction. Therefore, such proposals are more a sign of their authors' lack of understanding of blockchain fundamentals rather than something useful.

What do you think about it? Share your opinion in our Millionaire Crypto Chat. We’ll discuss other interesting stories from the world of finance there too.

SUBSCRIBE TO OUR CHANNEL ON TELEGRAM. THERE’S EVEN MORE INTERESTING NEWS HERE.