The location is where the secret key is stored. Wallet data is distributed but wallet holders are not.
In any case this kind of thing will be implemented by mandating it at the exchanges where crypto is converted to/from traditional currencies, making it impossible to actually use crypto (legally) without complying.
> The location is where the secret key is stored. Wallet data is distributed but wallet holders are not.
That doesn't hold well if you take into account that multisig allows you to require multiple signatures for a transactions and keep the signing capabilities on multiple jurisdictions.
Sure, but in person transactions don't scale well and if you act as an in-person money changer for large amounts of money you are likely to be criminally charged for unlicensed banking or money laundering. Most of the ones I've seen limit exchanges to less than a few hundred dollars to avoid bringing down the hammer on them. (It can technically still be illegal to exchange small amounts, but if the amounts are small authorities are less likely to bother.)
They work for hobbyists messing around with crypto and people who want to buy small amounts of droogs on black/grey markets, but aren't going to allow crypto to be mass adopted.
P2P marketplaces can record an exchange, sure, but how do you actually send or receive large volumes of Euros, Pounds Sterling, or Dollars without casting a "summon police" spell?
Peer to peer as in DEXs such as uniswap, sushiswap? They will be more challenging to regulate for sure. I kinda see this regulation and others coming as a way for authorities to keep control of current financial establishment...hence also lot of talk about central bank coins ...very interesting to see how this plays out in next 5yrs
In any case this kind of thing will be implemented by mandating it at the exchanges where crypto is converted to/from traditional currencies, making it impossible to actually use crypto (legally) without complying.