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agree on the gov't should not tell them who they can do business with. the license thing is tricky - on one hand, it makes sense, on the other, how do you make sure the process if fair. If we start talking about custodial wallets being banks (which they basically are), then they'd start shutting down one after another because they will not have any licenses.
Reputation, transparency, and liability would be some thoughts of how to deal with banks without government license and regulation.
Individuals can weigh the risk and benefit of each bank, as they do with custodial bitcoin wallets.
Open source wallets with long track records will be more attractive to users then closed source wallets that where just released yesterday.
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