The "Keep Your Coins Act" introduced by Senator Ted Budd (R-NC) on November 7 to the 118th U.S. Congress, represents a continued effort to promote increased financial independence and decentralization within the cryptocurrency ecosystem.^[3]

Overview

This proposed legislation seeks to provide individuals with the means to retain complete control over their digital assets, such as Bitcoin (BTC), without having to depend on third-party intermediaries like cryptocurrency exchanges.

The motivation behind this self-custody bill stems from the significant FTX collapse, which served as a stark reminder of the potential dangers associated with leaving funds on centralized platforms.

Senator Budd had this to say:

“As consumers face new challenges and risks associated with the use of digital currencies, we should be empowering individuals to maintain control over their own digital assets,” Senator Budd said. “This approach will foster financial freedom and a more decentralized cryptocurrency ecosystem.”

Should the act be approved, it would prevent federal agencies from implementing regulations that restrict the use of self-hosted wallets.
Additionally, the Senate bill aligns with earlier initiatives in the House, where Representative Warren Davidson introduced similar legislation in 2022. Davidson's "Keep Your Coins Act" successfully advanced through the House committee in July of the same year, although it has not yet undergone a comprehensive floor vote. The congressman has been a vocal champion for safeguarding self-custody wallets from government interference and has played a significant role in supporting the burgeoning industry in its interactions with regulatory bodies like the U.S. Securities and Exchange Commission (SEC).