Google Play Confirms Non-Custodial Wallets Are Staying

A recent policy update from Google Play Store caused uproar in the crypto world, sparking fears that non-custodial wallets would soon be banned. The misunderstanding, which came from a July 10 policy change, has now been cleared up after Google admitted the language was misleading and promised to make its stance clear.

Good to know

• Non-custodial wallets let users control their own private keys instead of relying on a third party.
• Google has confirmed these wallets do not need to register as banks or money services businesses.
• Custodial wallets, often run by exchanges, are still subject to licensing requirements in certain countries.

How the Confusion Started

The trouble began when The Rage published a piece pointing out that Google’s revised rules appeared to lump all crypto wallets—custodial and non-custodial—into the same category. In 15 jurisdictions including the U.S., UK, EU, and Canada, the new policy stated that apps offering “cryptocurrency exchanges and software wallets” would need government registration or licensing to remain in the Play Store.

That wording alarmed privacy advocates and crypto legal experts, who argued that it could wipe out non-custodial wallet apps from the platform entirely. Some called it “regulation by monopoly,” while others went as far as describing it as “a quiet coup on crypto.”

Google Responds Quickly

The backlash didn’t go unnoticed. In a public reply on X, Google said:

“Thanks for flagging this. Non-custodial wallets are not in scope of Google Play’s Cryptocurrency Exchanges and Software Wallets Policy. We are updating the Help Center to make this clear.”

The company also confirmed it would adjust the policy language to ensure developers and users understand that non-custodial wallets remain unaffected.

Why the Distinction Matters

In a custodial wallet, a company holds cryptocurrency on behalf of its customers, much like a bank, and is typically required to register with the U.S. Financial Crimes Enforcement Network (FinCEN) or similar regulators abroad. Non-custodial wallets work differently—users hold their private keys directly, making them responsible for security and transactions. This model keeps control in the hands of the user and, under current regulations, does not classify them as money services businesses.

The original policy’s lack of distinction could have forced developers of non-custodial wallets to either seek unnecessary licenses or pull their apps from certain regions. Google’s clarification reassures both developers and users that won’t be happening.