In a post on the US Congress official website, dated Jan. 14, a bill that reportedly exempted companies offering non-custodial crypto services to its clients from certain laws was resubmitted to the Congress.
The submitter of the bill was a member of the U.S. Congress itself, namely Tom Emmer, titled “To provide a safe harbour from licensing and registration for certain non-controlling blockchain developers and providers of blockchain services.”
But what are non-custodial services?
To answer this, let us know the difference between Custodial and Non-Custodial Crypto Services.
Custodial Crypto Services
Right from the start, anything that has to do with storing your cryptocurrencies with third parties, for example, crypto exchanges, trading platforms and brokerages, comes under the category of custodial services.
These services are relatively similar to what banks have been providing their clients for decades. The users, however, using these services never get the full power of their crypto assets. The biggest example is perhaps when a hard fork takes place in a blockchain, the exchanges simply stop all crypto trading, barring you from any transactions until the update has been completed.
In some cases, like when Bitcoin Classic (BCH) tokens were replaced by Bitcoin SV (BSV) tokens during Bitcoin’s hard fork, Coinbase decided that all future transactions would feature BSV tokens. This meant that the exchange was the deciding factor in when a user could start trading and which tokens he would be using in the future.
Some may have found this helpful as they won’t have to go through unnecessary hassles, others might not like their funds being controlled by another establishment. This is where non-custodial services come into play.
These services are exactly opposite to custodial services. The users have their own private key and their own passwords provided by these services.
In addition to that, customers have full authority over their crypto assets. For example, those using non-custodial services could split their funds either way after Bitcoin’s hard fork. They could decide to go with either BCH or BSV and nobody could alter their decisions.
However, while being in complete control of their funds, users were also totally responsible for the safety of their funds. Any mishap that would lead to a loss of their funds would be nobody’s fault but their own.
In a report, Emmer is going to submit two more bills in support of blockchain technology and cryptocurrencies. They are “Resolution Supporting Digital Currencies and Blockchain Technology” and “Blockchain Regulatory Certainty Act.”
The members of the U.S. Congress, in recent times, have proposed a fair few bills in relation to cryptocurrencies and the uses it’s being put to.