diff --git a/electrum/commands.py b/electrum/commands.py
index 869ece79c..8ed1201d1 100644
--- a/electrum/commands.py
+++ b/electrum/commands.py
@@ -293,6 +293,7 @@ class Commands:
     def _setconfig_normalize_value(cls, key, value):
         if key not in ('rpcuser', 'rpcpassword'):
             value = json_decode(value)
+            # call literal_eval for backward compatibility (see #4225)
             try:
                 value = ast.literal_eval(value)
             except:
@@ -303,6 +304,10 @@ class Commands:
     async def setconfig(self, key, value):
         """Set a configuration variable. 'value' may be a string or a Python expression."""
         value = self._setconfig_normalize_value(key, value)
+        if self.daemon and key == 'rpcuser':
+            self.daemon.commands_server.rpc_user = value
+        if self.daemon and key == 'rpcpassword':
+            self.daemon.commands_server.rpc_password = value
         self.config.set_key(key, value)
         return True
 
diff --git a/electrum/daemon.py b/electrum/daemon.py
index e2a29b16d..8d926fbd9 100644
--- a/electrum/daemon.py
+++ b/electrum/daemon.py
@@ -120,6 +120,10 @@ def request(config: SimpleConfig, endpoint, args=(), timeout=60):
 def get_rpc_credentials(config: SimpleConfig) -> Tuple[str, str]:
     rpc_user = config.get('rpcuser', None)
     rpc_password = config.get('rpcpassword', None)
+    if rpc_user == '':
+        rpc_user = None
+    if rpc_password == '':
+        rpc_password = None
     if rpc_user is None or rpc_password is None:
         rpc_user = 'user'
         bits = 128
@@ -130,8 +134,6 @@ def get_rpc_credentials(config: SimpleConfig) -> Tuple[str, str]:
         rpc_password = to_string(pw_b64, 'ascii')
         config.set_key('rpcuser', rpc_user)
         config.set_key('rpcpassword', rpc_password, save=True)
-    elif rpc_password == '':
-        _logger.warning('RPC authentication is disabled.')
     return rpc_user, rpc_password