📅15 (June) Report on Self-Custody Wallets and Their Role in Digital Finance

By Global Digital Finance, Block, TRM Labs, and Coinbase
🏳️Findings:
The report highlights that the shift toward digital finance is accelerating, and self-custody wallets are becoming a critical part of the new financial infrastructure.
🏳️ Key findings:
1⃣Self-custody wallets are multi-purpose infrastructure.
2⃣Payments and remittances are already a major real-world use case.
3⃣Stablecoins are central to self-custody wallet activity.
4⃣Transaction patterns are consistent with legitimate consumer and business activity.
5⃣Self-custody is especially relevant for underserved and financially constrained users.
6⃣Self-custody wallets provide the access layer for DeFi and the emerging tokenized asset ecosystem.
7⃣Illicit exposure is minimal, and illicit fund flows are not concentrated in wallets.
8⃣Interaction with regulated entities remains significant.
9⃣Activity patterns show sustained and purposeful usage.
🔟A layered compliance architecture already exists.
1⃣1⃣Blanket restrictions are disproportionate, difficult to enforce, and inconsistent with international consensus.
🏳️Recommendations to Policymakers:
1⃣Adopt risk-based and evidence-informed approaches.
2⃣Preserve the distinction between infrastructure and intermediaries.
3⃣Anchor AML/CFT obligations at regulated touchpoints.
4⃣Reject automatic higher-risk classification of self-custody transactions.
5⃣Engage with technological evolution.
6⃣Invest in blockchain analytics as a supervisory tool.
7⃣Coordinate internationally to avoid regulatory fragmentation.
8⃣Commission further empirical research.
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