#FDIC Restricts Banks from Using Ethereum#
Hot Topic Overview
Overview
The Federal Deposit Insurance Corporation (FDIC) is taking a cautious approach to banks using public blockchains like Ethereum, requiring them to undergo more stringent scrutiny before adopting them. This news comes from a trove of unredacted crypto-related communications between the FDIC and its member banks obtained by Coinbase through a Freedom of Information Act request. The FDIC appears to favor banks using private permissioned networks over public blockchains, as the decentralized and transparent nature of public blockchains could pose regulatory risks. The FDIC has also asked member banks to pause services related to buying and selling Bitcoin and to cease implementing activities related to crypto assets. This move signals the FDIC's cautious stance on banks' involvement in the cryptocurrency space and could have an impact on the development of banks' use of blockchain technology.
Ace Hot Topic Analysis
Analysis
The Federal Deposit Insurance Corporation (FDIC) is cautious about banks using public blockchains like Ethereum and requires banks to undergo more rigorous scrutiny before using them. According to documents obtained by Coinbase through a Freedom of Information Act request, the FDIC sent a letter to a member bank in March 2022 expressing concerns about the bank's plan to launch a "bank digital deposit" program on a public blockchain. The FDIC appears to favor banks using private permissioned networks over public blockchains, as the decentralized and permissionless nature of public blockchains would result in activities being completely public and uncontrollable by third parties. The FDIC believes that launching products on public blockchains requires a more stringent review process and has asked member banks to pause activities related to crypto assets, including buying and selling Bitcoin. This incident indicates that the FDIC is cautious about the risks and regulatory challenges associated with banks using public blockchains and wants to ensure that banks can effectively manage risks when using crypto technologies.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
FDIC does not encourage member banks to use public blockchains, such as Ethereum, because it believes that the decentralization and transparency of public blockchains pose security and regulatory risks.
FDIC prefers member banks to use private permissioned networks, as these networks allow for better control and management.
FDIC has implemented a more stringent review process for member banks launching products on public blockchains.
FDIC has required member banks to pause activities related to crypto assets, including the buying and selling of Bitcoin.