diff --git a/.github/workflows/example.yml b/.github/workflows/example.yml
index 24e2b8a..c2e48e3 100644
--- a/.github/workflows/example.yml
+++ b/.github/workflows/example.yml
@@ -56,13 +56,13 @@ jobs:
 
       - name: Create and fund an account
         run: |
-          go run ./cmd/golembase account create
-          go run ./cmd/golembase account fund
+          printf "password" | go run ./cmd/golembase account create
+          printf "password" | go run ./cmd/golembase account fund
         working-directory: ./gb-op-geth
 
       - name: Run the example SDK app
         run: >
-          nix develop --no-write-lock-file --reference-lock-file ../flake.lock --command
+          printf "password" | nix develop --no-write-lock-file --reference-lock-file ../flake.lock --command
           ./result/bin/main --instance local
         working-directory: ./example
 
diff --git a/README.md b/README.md
index 1ff4c67..305edd5 100644
--- a/README.md
+++ b/README.md
@@ -20,7 +20,7 @@ The repo also contains an example application to showcase how you can use this S
 
 (Note: As an alternative to installing the demo CLI, you can build the [actual CLI](https://github.com/Golem-Base/golembase-op-geth/blob/main/cmd/golembase/README.md) as it's included in the golembase-op-geth repo.)
 
-When you create a user, it will generate a private key file called `private.key` and store it in:
+When you create a user, it will generate a private key file called `wallet.json` and store it in:
 
 * `~/.config/golembase/` on **Linux**
 * `~/Library/Application Support/golembase/` on **macOS**
diff --git a/example/golem_base_sdk_example/__init__.py b/example/golem_base_sdk_example/__init__.py
index 29473d0..624b965 100755
--- a/example/golem_base_sdk_example/__init__.py
+++ b/example/golem_base_sdk_example/__init__.py
@@ -5,7 +5,6 @@
 import logging
 import logging.config
 
-import anyio
 from golem_base_sdk import (
     Annotation,
     GolemBaseClient,
@@ -13,8 +12,9 @@
     GolemBaseDelete,
     GolemBaseExtend,
     GolemBaseUpdate,
+    WalletError,
+    decrypt_wallet,
 )
-from xdg import BaseDirectory
 
 logging.config.dictConfig(
     {
@@ -59,11 +59,12 @@
 
 async def run_example(instance: str) -> None:  # noqa: PLR0915
     """Run the example."""
-    async with await anyio.open_file(
-        BaseDirectory.xdg_config_home + "/golembase/private.key",
-        "rb",
-    ) as private_key_file:
-        key_bytes = await private_key_file.read(32)
+    try:
+        key_bytes = await decrypt_wallet()
+    except WalletError as e:
+        print(f"Error: {e}")
+    except KeyboardInterrupt:
+        print("\nOperation cancelled by user.")
 
     client = await GolemBaseClient.create(
         rpc_url=INSTANCE_URLS[instance]["rpc"],
diff --git a/golem_base_sdk/__init__.py b/golem_base_sdk/__init__.py
index 8ca5270..a8e76d2 100755
--- a/golem_base_sdk/__init__.py
+++ b/golem_base_sdk/__init__.py
@@ -51,6 +51,10 @@
     WatchLogsHandle,
 )
 from .utils import rlp_encode_transaction
+from .wallet import (
+    WalletError,
+    decrypt_wallet,
+)
 
 __all__: Sequence[str] = [
     # Exports from .types
@@ -73,6 +77,9 @@
     # Exports from .constants
     "GOLEM_BASE_ABI",
     "STORAGE_ADDRESS",
+    # Exports from .wallet
+    "decrypt_wallet",
+    "WalletError",
     # Exports from this file
     "GolemBaseClient",
     # Re-exports
diff --git a/golem_base_sdk/wallet.py b/golem_base_sdk/wallet.py
new file mode 100644
index 0000000..ce4351f
--- /dev/null
+++ b/golem_base_sdk/wallet.py
@@ -0,0 +1,44 @@
+"""Wallet module for creating and decrypting Ethereum wallets."""
+
+import getpass
+import json
+import sys
+from pathlib import Path
+from typing import cast
+
+import anyio
+from eth_account import Account
+from xdg import BaseDirectory
+
+WALLET_PATH = Path(BaseDirectory.xdg_config_home) / "golembase" / "wallet.json"
+
+class WalletError(Exception):
+    """Base class for wallet-related errors."""
+
+    pass
+
+async def decrypt_wallet() -> bytes:
+    """Decrypts the wallet and returns the private key bytes."""
+    if not WALLET_PATH.exists():
+        raise WalletError(f"Expected wallet file to exist at '{WALLET_PATH}'")
+
+    async with await anyio.open_file(
+        WALLET_PATH,
+        "r",
+    ) as f:
+        keyfile_json = json.loads(await f.read())
+
+        if not sys.stdin.isatty():
+            password = sys.stdin.read().rstrip()
+        else:
+            password = getpass.getpass("Enter password to decrypt wallet: ")
+
+        try:
+            print(f"Attempting to decrypt wallet at '{WALLET_PATH}'")
+            private_key = Account.decrypt(keyfile_json, password)
+            print("Successfully decrypted wallet")
+        except ValueError as e:
+            raise WalletError("Incorrect password or corrupted wallet file.") from e
+
+        return cast(bytes, private_key)
+
diff --git a/nix/devshell.nix b/nix/devshell.nix
index c83b69b..9723cbc 100644
--- a/nix/devshell.nix
+++ b/nix/devshell.nix
@@ -12,6 +12,7 @@ perSystem.devshell.mkShell {
   packages = [
     virtualenvDev
     pkgs.uv
+    pkgs.ruff
   ];
 
   env = [
diff --git a/pyproject.toml b/pyproject.toml
index ed6cff5..87e3997 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -14,6 +14,8 @@ requires-python = ">=3.12"
 dynamic = ["description"]
 
 dependencies = [
+  "anyio>=4.10.0",
+  "pyxdg>=0.28",
   "rlp>=1.2.0",
   "web3>=4.7.2",
 ]
diff --git a/uv.lock b/uv.lock
index 96432b5..811f5a0 100644
--- a/uv.lock
+++ b/uv.lock
@@ -83,6 +83,20 @@ wheels = [
     { url = "https://files.pythonhosted.org/packages/78/b6/6307fbef88d9b5ee7421e68d78a9f162e0da4900bc5f5793f6d3d0e34fb8/annotated_types-0.7.0-py3-none-any.whl", hash = "sha256:1f02e8b43a8fbbc3f3e0d4f0f4bfc8131bcb4eebe8849b8e5c773f3a1c582a53", size = 13643, upload-time = "2024-05-20T21:33:24.1Z" },
 ]
 
+[[package]]
+name = "anyio"
+version = "4.10.0"
+source = { registry = "https://pypi.org/simple" }
+dependencies = [
+    { name = "idna" },
+    { name = "sniffio" },
+    { name = "typing-extensions", marker = "python_full_version < '3.13'" },
+]
+sdist = { url = "https://files.pythonhosted.org/packages/f1/b4/636b3b65173d3ce9a38ef5f0522789614e590dab6a8d505340a4efe4c567/anyio-4.10.0.tar.gz", hash = "sha256:3f3fae35c96039744587aa5b8371e7e8e603c0702999535961dd336026973ba6", size = 213252, upload-time = "2025-08-04T08:54:26.451Z" }
+wheels = [
+    { url = "https://files.pythonhosted.org/packages/6f/12/e5e0282d673bb9746bacfb6e2dba8719989d3660cdb2ea79aee9a9651afb/anyio-4.10.0-py3-none-any.whl", hash = "sha256:60e474ac86736bbfd6f210f7a61218939c318f43f9972497381f1c5e930ed3d1", size = 107213, upload-time = "2025-08-04T08:54:24.882Z" },
+]
+
 [[package]]
 name = "attrs"
 version = "25.3.0"
@@ -433,6 +447,8 @@ name = "golem-base-sdk"
 version = "0.0.7"
 source = { editable = "." }
 dependencies = [
+    { name = "anyio" },
+    { name = "pyxdg" },
     { name = "rlp" },
     { name = "web3" },
 ]
@@ -446,6 +462,8 @@ dev = [
 
 [package.metadata]
 requires-dist = [
+    { name = "anyio", specifier = ">=4.10.0" },
+    { name = "pyxdg", specifier = ">=0.28" },
     { name = "rlp", specifier = ">=1.2.0" },
     { name = "web3", specifier = ">=4.7.2" },
 ]
@@ -916,6 +934,15 @@ wheels = [
     { url = "https://files.pythonhosted.org/packages/b4/f4/f785020090fb050e7fb6d34b780f2231f302609dc964672f72bfaeb59a28/pywin32-310-cp313-cp313-win_arm64.whl", hash = "sha256:e308f831de771482b7cf692a1f308f8fca701b2d8f9dde6cc440c7da17e47b33", size = 8458152, upload-time = "2025-03-17T00:56:07.819Z" },
 ]
 
+[[package]]
+name = "pyxdg"
+version = "0.28"
+source = { registry = "https://pypi.org/simple" }
+sdist = { url = "https://files.pythonhosted.org/packages/b0/25/7998cd2dec731acbd438fbf91bc619603fc5188de0a9a17699a781840452/pyxdg-0.28.tar.gz", hash = "sha256:3267bb3074e934df202af2ee0868575484108581e6f3cb006af1da35395e88b4", size = 77776, upload-time = "2022-06-05T11:35:01Z" }
+wheels = [
+    { url = "https://files.pythonhosted.org/packages/e5/8d/cf41b66a8110670e3ad03dab9b759704eeed07fa96e90fdc0357b2ba70e2/pyxdg-0.28-py2.py3-none-any.whl", hash = "sha256:bdaf595999a0178ecea4052b7f4195569c1ff4d344567bccdc12dfdf02d545ab", size = 49520, upload-time = "2022-06-05T11:34:58.832Z" },
+]
+
 [[package]]
 name = "regex"
 version = "2024.11.6"
@@ -981,6 +1008,15 @@ wheels = [
     { url = "https://files.pythonhosted.org/packages/99/fb/e4c0ced9893b84ac95b7181d69a9786ce5879aeb3bbbcbba80a164f85d6a/rlp-4.1.0-py3-none-any.whl", hash = "sha256:8eca394c579bad34ee0b937aecb96a57052ff3716e19c7a578883e767bc5da6f", size = 19973, upload-time = "2025-02-04T22:05:57.05Z" },
 ]
 
+[[package]]
+name = "sniffio"
+version = "1.3.1"
+source = { registry = "https://pypi.org/simple" }
+sdist = { url = "https://files.pythonhosted.org/packages/a2/87/a6771e1546d97e7e041b6ae58d80074f81b7d5121207425c964ddf5cfdbd/sniffio-1.3.1.tar.gz", hash = "sha256:f4324edc670a0f49750a81b895f35c3adb843cca46f0530f79fc1babb23789dc", size = 20372, upload-time = "2024-02-25T23:20:04.057Z" }
+wheels = [
+    { url = "https://files.pythonhosted.org/packages/e9/44/75a9c9421471a6c4805dbf2356f7c181a29c1879239abab1ea2cc8f38b40/sniffio-1.3.1-py3-none-any.whl", hash = "sha256:2f6da418d1f1e0fddd844478f41680e794e6051915791a034ff65e5f100525a2", size = 10235, upload-time = "2024-02-25T23:20:01.196Z" },
+]
+
 [[package]]
 name = "toolz"
 version = "1.0.0"